Coal Mining Industry Indonesia Update: Rising Price in August
The coal price has gained some further momentum over the past month. Indonesia's benchmark coal price (in Indonesian: Harga Batubara Acuan, or HBA) rose 6.36 percent month-on-month (m/m) to USD $83.97 per metric ton in August 2017. The average HBA price so far in 2017 stands at USD $82.02 per ton, up significantly from an average of USD $61.8 per ton in full-year 2016.
Bambang Gatot Ariyono, Director General of Coal and Mineral Mining at Indonesia's Energy and Mineral Resources Ministry, said the rising benchmark coal price of Indonesia is largely due to policies of the Chinese government. Miners in China now produce less coal and therefore the nation's second-largest economy needs more coal imports, hence supporting international coal prices.
Moreover, coal demand in Southeast Asia has increased as well, particularly from Malaysia.
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.
Hendra Sinadia, Deputy Executive Director of the Indonesian Coal Mining Association (APBI), said the Newcastle index - one of the components within the HBA - rose significantly over the past month as there emerged some concern about Australian coal supplies due to strike actions. Sinadia added that the HBA price - currently at +USD $80 per ton levels - is already much better than initially assumed by APBI. The institution earlier believed the coal price would be around USD $75 per ton in 2017. Although there are various external factors that affect the coal price, Sinadia hopes the price will remain stable in the remainder of the year.
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 | 83.97 |
| 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