The Indonesian government has set its thermal coal benchmark price (HBA) for March 2023 at $283.08/tonne (t), up 2.17% compared to $277.05/t in February.
The Indonesian Minister for Energy and Mineral Resources has changed the guidelines for calculation of the benchmark price for sale of coal commodities.
The quality of coal for new HBA is based on 6200-6400 GAR instead of the previous 6322 GAR coal. HBA I is based on 5100-5300 GAR and HBA II is based on 4100- 4300 GAR. The new formula takes into account 70% of the average coal selling price in the preceding month and 30% of the average coal selling price two months before. In this manner the prices are fair to government and companies as actual prices and HBA are not too far apart.
The Ministry of Energy and Mineral Resources of the Republic of Indonesia has also declared prices for HBA I and HBA II. The price for HBA I is $136.7/t and for HBA II the price is $102.26/t.
The HBA was previously formed by four coal indices, namely the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC) and Platts 5900. However, now it has been revised to actual selling prices for the previous month as well as the previous couple of months.
The government of Indonesia has been publishing HBA since January 2009 to be used by coal producers for all spot and term contracts. The official implementation of HBA commenced in September 2011 and, according to regulation, it is meant to be used by the holders of production operation IUPs, special production operation IUP’s, and CCoWs as a reference in determining the coal selling price for a particular period.
The coal price reference aims to increase government revenue from coal royalties. Beginning in March, the new HBA regulations replace the previous regulations to determine the HBA, HBA I and HBA II monthly prices.
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