Coal Mining News Indonesia: Benchmark Price Rises in July 2017
Indonesia's benchmark coal price (in Indonesian: Harga Batubara Acuan, or HBA) rose 4.6 percent month-on-month (m/m) to USD $78.95 per metric ton in July 2017. The HBA price, set by Indonesia's Energy and Mineral Resources Ministry each month, is based on (1) the Platts Kalimantan (5,900 kcal/kg GAR assessment), (2) the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), (3) the Newcastle Export Index - formerly the Barlow-Jonker index (6,322 kcal/kg GAR) - and (4) the globalCOAL Newcastle (6,000 kcal/kg NAR) index.
Compared to one year ago the HBA price has risen 49 percent, hence it is a more favorable environment for coal miners. However, the future direction of the coal price is very hard to predict as it highly depends on Chinese policies. The coal price is currently being supported by China's government. Authorities in the world's second-largest economy curbed coal production in an attempt to let the coal price rise. This then improves the financial situation of Chinese miners. Prior to these mining policies there had emerged concern about the non-performing loan (NPL) ratio in China's banking sector as coal miners encountered difficulty to repay debt to banks.
Read also: Overview of Indonesia's Coal Mining Industry
China lowered production hours at local coal mining sites, a policy that is evaluated every three months. If the nation wants to raise the coal price, then it simply decides to import coal. But when it decides to slow coal imports, then the price falls.
Indonesia's HBA price for thermal coal forms the basis for determining the prices of 75 Indonesian coal products and calculating the royalties that need to be paid by producers for each metric ton of coal they sell.
Indonesian Government's Benchmark Thermal Coal Price (HBA):
| Month | 2012 | 2013 | 2014 | 2015 |
2016 | 2017 |
| January | 109.29 | 87.55 | 81.90 | 63.84 | 53.20 | 86.23 |
| February | 111.58 | 88.35 | 80.44 | 62.92 | 50.92 | 83.32 |
| March | 112.87 | 90.09 | 77.01 | 67.76 | 51.62 | 81.90 |
| April | 105.61 | 88.56 | 74.81 | 64.48 | 52.32 | 82.51 |
| May | 102.12 | 85.33 | 73.60 | 61.08 | 51.20 | 83.81 |
| June | 96.65 | 84.87 | 73.64 | 59.59 | 51.87 | 75.46 |
| July | 87.56 | 81.69 | 72.45 | 59.16 | 53.00 | 78.95 |
| August | 84.65 | 76.70 | 70.29 | 59.14 | 58.37 | |
| September | 86.21 | 76.89 | 69.69 | 58.21 | 63.93 | |
| October | 86.04 | 76.61 | 67.26 | 57.39 | 69.07 | |
| November | 81.44 | 78.13 | 65.70 | 54.43 | 84.89 | |
| December | 81.75 | 80.31 | 69.23 | 53.51 | 101.69 |
in USD/ton
Source: Ministry of Energy and Mineral Resources
Indonesian Production, Export, Consumption & Price of Coal:
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
| Production (in mln tons) |
217 | 240 | 254 | 275 | 353 | 412 | 474 | 458 | 461 | 434 |
| Export (in mln tons) |
163 | 191 | 198 | 210 | 287 | 345 | 402 | 382 | 366 | 343 |
| Domestic (in mln tons) |
61 | 49 | 56 | 65 | 66 | 67 | 72 | 76 | 87 | 91 |
| Price (HBA) (in USD/ton) |
n.a | n.a | 70.7 | 91.7 | 118.4 | 95.5 | 82.9 | 72.6 | 60.1 | 61.8 |
Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources
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