Indonesia's Energy and Mineral Resources Ministry plans to allow holders of long-standing Coal Contracts of Work (Perjanjian Karya Pengusahaan Pertambangan Batubara, or PKP2B) to request for an extension of its mining activities five years before their existing contracts expire (PKP2B).

However, the extension will also mean that PKP2B-holders, which are mostly the established larger players in Indonesia's mining sector, see their PKP2B contracts being replaced with the Special Mining Business License (in Indonesian: Izin Usaha Pertambangan Khusus, or IUPK). This is in line with the 2009 Mining Law (Law No. 4/2009 on Mineral and Coal Mining) that introduced the Mining Business License (IUP) and IUPK as the new legal vehicles in the mining industry.

Indonesian Government's Benchmark Thermal Coal Price (HBA):

Month  2017  2018
January  86.23  95.54
February  83.32 100.69
March  81.90 101.86
April  82.51  94.75
May  83.81  89.53
June  75.46  96.61
July  78.95 104.65
August  83.97 107.83
September  92.03 104.81
October  93.99 100.89
November  94.84  97.90
December  94.04
Average  85.9

 

Month  2012  2013  2014  2015
 2016
January 109.29  87.55  81.90  63.84  53.20
February 111.58  88.35  80.44  62.92  50.92
March 112.87  90.09  77.01  67.76  51.62
April 105.61  88.56  74.81  64.48  52.32
May 102.12  85.33  73.60  61.08  51.20
June  96.65  84.87  73.64  59.59  51.87
July  87.56  81.69  72.45  59.16  53.00
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
Average  95.5  82.9  72.6  60.1  61.8

in USD/ton
Source: Ministry of Energy and Mineral Resources

Indonesian Production, Export, Consumption & Price of Coal:

  2014 2015 2016 2017 2018
Production
(in million ton)
 458  461  456  461  507¹
Export
(in million ton)
 382  375  366  364  361¹
Domestic
(in million ton)
  76   86   90   97  146¹
Price (HBA)
(in USD/ton)
 72.6  60.1  61.8  85.9     -

 

  2008 2009 2010 2011 2012 2013
Production
(in million ton)
 240  254  275  353  412  474
Export
(in million ton)
 191  198  210  287  345  402
Domestic
(in million ton)
  49   56   65   66   67   72
Price (HBA)
(in USD/ton)
  n.a  70.7  91.7 118.4  95.5  82.9

¹ government target
Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources

The text above is short summary of the article that is included in the November 2018 edition of our research report. This article discusses:

(1) the planned revision of Indonesian Government Regulation No. 23/2010;
(2) reactions from stakeholders in Indonesia's coal mining industry;
(3) an update on the coal mining industry of Indonesia.

Read the full article in the November 2018 edition of our monthly research report (scheduled to be released in early December 2018). You can purchase this report by sending an email to info@indonesia-investments.com or a WhatsApp (WA) message to the following number: +6287884106944

Bahas