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Coal players report potentially significant revenue decrease
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This picture taken on May 19, 2017, shows an open-pit coal mine in Jambi. (AFP/Goh Chai Hin)
C
oal mining companies have reported potentially significant decreases in revenue, following the implementation of Energy and Mineral Resources Decree No. 30/2018 on coal domestic market obligation since March 12.
Under the decree, which is a technical guidance to Government Regulation No. 8/2018 on mineral and coal mining businesses, coal mining companies are required to sell 25 percent of the total commodity production to electricity producers with a maximum price of US$70 per metric ton (MT).
“What happens now is that we may see potential decreases in revenue worth Rp 2.5 trillion ($175 million) [this year],” said PT Kaltim Prima Coal director Eddie J. Soebari said in Jakarta on Tuesday after a hearing with the House of Representatives’ Commission II, which oversees mining affairs.
PT Arutmin Indonesia president director Ido Hutabarat made a similar statement, saying his company had calculated the potential decrease in revenue.
“In 2018, the potential decrease in the company revenue will reach $67.8 million since the implementation of the regulation on March 12,” Ido said as reported by tempo.co.
He said the decrease in revenue was calculated from the sale of 7.4 million MT to state-owned electricity PLN.
Previously, Energy and Mineral Resources Minister Ignasius Jonan said the policy was introduced to keep the electricity rates affordable for the people and to help the industry be more competitive.
Coal-fired power plants accounted for 57 percent of Indonesia’s power generation capacity of 60,491 megawatts last year. PLN needs cheaper coal prices because the government has decided not to increase electricity rates until 2019. (bbn)
