ESDM Will Complete Revision of Reference Coal Price This Year
- 2023-02-27
- Posted by: Widyadhana Mufida
- Categories: Commodities, News
The Ministry of Energy and Mineral Resources (ESDM) targets the revision of the Reference Coal Price (RCP) this year. Previously, coal prices had soared due to the impact of the Covid-19 pandemic. As a result, there is a disparity in the actual selling price of exports using the Indonesia Coal Index (ICI) with the RCP being the benchmark for paying royalties.
According to nasional.kontan.co.id, Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, Irwandy Arif explained that Indonesia uses 4 indexes for RCP. These four indices are the Globalcoal Newcastle Index (GCNC), the Newcastle Export Index (NEX), the Platts Index and the Indonesia Coal Index (ICI). The index has a balanced composition with 25% each.
“Imagine if he had to pay royalties at US$ 277 per ton. While he can only sell for US$ 47.76 per ton,” he explained in the Mining For Journalist training in Bogor, Saturday (25/2).
Irwandy stated that there is a big difference between RCP to pay royalties and sales. As a result, many coal companies objected and demanded that the government immediately correct the RCP. Irwandy again reminded the government to be careful if prices return to normal and all indexes are in-line.
RCP Simulation
Therefore, the Ministry of Energy and Mineral Resources is planning the right RCP formulation. One of the efforts made is to carry out a simulation to ensure the RCP formulation. They will carried out the simulations multiple times, so that RCP is in line with changing situations and conditions.
“Now we are looking for it, in a correct and good process. Even though there is price volatility, it is in-line between the RCP and the selling price. That will be very good and will not harm the industry either, in the process, hopefully not for long,” Irwandy said.
He ensured that the RCP revision would be completed this year. He stated that his party was having an intensive meeting between the Minister of Energy and Mineral Resources, the Directorate General of Mineral and Coal, and Special Staff.