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Jakarta Post

Govt to help settle coal price for power plant

Govt to help settle coal price for power plant
Anton Hermansyah
Jakarta   ●   Fri, March 11, 2016

Activities at one coal mining site owned by PT Adaro Indonesia in Balangan, South Kalimantan.(The Jakarta Post/R. Bertho Wedhatama)

The government will intermediate between coal producers and power plants to settle disagreements on the price of coal amid the plunge in value of the fossil-fuel commodity.

Energy and Mineral Resources Minister Sudirman Said explained that amid the declining coal price, local miners have cut their production so significantly that it has affected the coal supply for power plants as the main local buyer.

"I have met with the Indonesian Coal Mining Association [APBI] and listened to their demands. The government is currently considering several options," he said after a discussion with the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta on Thursday.

APBI, he further said, had requested the government to make a long-term coal pricing standard, by omitting the fallen global price benchmark. The association also demanded an extra payment as an "insurance premium" that stood at one to three percent of the basic power tariff.

When questioned about the insurance premium, Sudirman declined to comment further but explained the mediation plan instead. "The coal producers want a higher price to mine again, but the power plants urge a low buying price. The government is mediating both sides to find a balanced price," he said. (ags)