Interview-Indonesia plans monthly price for coals firms

07-Aug-2008 Intellasia | Reuters | 7:01 AM Print This Post

Indonesia, the world’s largest thermal coal exporter, plans to set an index-linked coal price each month for miners to maximise revenue, a top mining official told Reuters on Tuesday.

Indonesia also aims to set a minimum obligation in June each year for the amount of production miners must allocate to the domestic market in the year ahead, said Bambang Setiawan, the newly appointed director general of mineral, coal and geothermal.

“It is our right to get the exact price. Otherwise we lose our money,” Setiawan said in an interview with Reuters.

The government of President Susilo Bambang Yudhoyono has come under pressure to boost the returns from the country’s rich energy and mineral resources as commodity prices boom.

But mining companies are also concerned about their contracts being respected, while there have also been market worries over any impact on crucial exports.

Currently, coal producers sell coal to buyers at a fixed price for a contracted period. In the future, the government wants producers to be able to adjust coal prices in line with the movement in global coal prices during the contract period.

The new regulations on coal pricing and domestic market obligations could be in place in the next few months once two ministerial decrees are approved, added Setiawan, who was appointed last month.

The official said that Indonesia currently had no plans for a windfall tax on profits at coal firms, something being considered for energy firms.

The country was also preparing a presidential decree that would allow companies to undertake underground mining in forest areas, he said.

 


Category: ResourceAsia

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