Increases in Coal Mining Contribution

Reference price for coal (HBA) in October 2017 keeps increasing; considered as the highest position this year. The government then improves its production target to boost its contribution to the state revenue. However, the downstream sector seems not growing optimally.

The HBA in October 2017 amounted to USD93.99 per tonne, spiked from USD92.03 last month. In January, coal price set at USD86.23 per tonne, which slumped to USD75.46 dollar AS per tonne in June. Coal price continued to increase since July until today.

The Chairman of Indonesian Mining Institute; Irwandy Arif said coal price increase triggered by the China and India policies regarding the production controlling and political issues between North Korea and the USA. The rampant development of steam power plant in Asia also contributed the coal price increase. “The industrial circles have been seeing the possibility of the coal price increase since 2016 when the acquisition went up along with the production improvement plans,” said Irwandy, Monday (10/9), in Jakarta.

In associating with the matter, the government believed the state revenue form the sector would reach to IDR33 trillion, which is higher than the realization in the preceding year of IDR27.21 trillion. “The state revenue form the mineral and coal mining sector per September 2017 reached to IDR25.73 trillion. The sector considered to contribute to IDR33 trillion until the end of the year,” said the Minister of Energy and Mineral Resources Ignasius Jonan, on another occasion.

The government will have the production of coal mining lift up to 477 million tonnes in 2017; higher than its projection of 413 million.

High Capital

Nevertheless, Executive Director of Indonesian Chemical Industry Federation Suhat Miyarso noted that coal mine down-streaming in Indonesia hadn’t grown yet. “Coal must be converted to gas (gasification) before used as the basic commodities, energy, including as the replacement of LPG,” said Suhat, Monday.

The investment in the gasification of coal needs a big funds. “The investment is three times bigger than the naphtha or oil sector,” said Suhat.

To boost the private investment in the downstream coal industry, Suhat hoped the government would provide the necessary infrastructure to facilitate it. (Ast)


Source : Kompas

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