Jakarta (ANTARA News) - The Association of Indonesian Coal Producers (APBI) predicted tens of small-scale coal mining companies will go bankrupt due to a regulation which sets the price of coal sold to power plants below their production cost.
"In principle, APBI complies with the governments decision and implements the mandate of the energy and mineral resources ministers decree," APBI Chief Hendra Sinadia said in a press statement released on Friday.
The government has accommodated coal producers complaints properly when it comes to the implementation of the decree. The decree was later revised and made retroactive to January 2018, he said.
But the decree has an impact on small-scale coal mining firms.
Based on the energy and mineral resources ministers decree number 1395K/30/MEM/2018 concerning the price of coal for the supply of electrical power for public interest, the price of coal is set at US$70 per metric ton.
"The reference price of US$70 per metric ton is for coal with a caloric level of 6,322. In general, the coal sold to power plants has a caloric level of 4,000 to 5,000. The coal produced by small coal mining firms has lower calories and is sold at US$30-40 per ton and the lowest price is US$17 per ton. Of course, the price is lower than the production cost," he added.
Source: ANTARA News