May 2023 Coal Reference Price Still Decreasing

The Ministry of Energy and Mineral Resources (ESDM) has set the Coal Reference Price (HBA) for May 2023 at US$206.16 per ton, or Rp3,058,290 (assuming an exchange rate of Rp14,834 per US$).

This figure represents a significant decrease from the April 2023 price of US$265.26 or Rp3,935,012 per ton.

The HBA I for May 2023 is set at US$119.64 or Rp1,774,805 per ton, an increase from April 2023's US$102.53 or Rp1,520,986.

HBA II for May 2023 is set at US$82.23 or Rp1,219,845 per ton, a decrease from April 2023's US$87.81 or Rp1,302,621.

This HBA determination is outlined in the ESDM Minister's Decree Number 84.K/MB.01/MEM.B/2023 concerning the Reference Price for Metal Minerals and Coal for May 2023.

Previously, the HBA was determined based on the average of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900, with quality equated to a calorific value of 6,322 kcal/kg GAR, total moisture of 8%, total sulfur of 0.8%, and ash of 15%.

However, starting in March 2023, the HBA is calculated based on the average of the realized coal selling price from the previous month (70% proportion) and the realized price from two months prior (30% proportion).

HBA is also categorized into three grades based on coal quality:

* HBA: quality equated to a calorific value of 6,322 kcal/kg GAR, total moisture of 12.58%, total sulfur of 0.71%, and ash of 7.58%.
* HBA I: quality equated to a calorific value of 5,200 kcal/kg GAR, total moisture of 23.12%, total sulfur of 0.69%, and ash of 6%.
* HBA II: quality equated to a calorific value of 4,200 kcal/kg GAR, total moisture of 35.29%, total sulfur of 0.2%, and ash of 4.21%.

Agung Pribadi, Head of the Bureau of Communication, Public Information Services, and Cooperation (KLIK) at the Ministry of ESDM, stated that the HBA determination formula aims to obtain a coal reference price acceptable to the market while considering state revenue. "This consideration underlies the need to issue regulations on pricing based on market mechanisms," said Agung, as quoted from the official website of the Ministry of ESDM.