Price of Mine Mouth is Discussed 27 July 2011
Consortium of Korea Midland Power & Triaryani target PLTU Sumsel IV
Jakarta - The Government and stakeholders in the coal industry and electricity will be discussing the coal price for Mine Mouth at the end of this month so that it can become a reference for investors on that type of plants and mine mouth coal based power plant.
The CEO of Energi Primer PLN Nur Pamudji admits that the government has invited the electricity SOE to discuss the reference price of Mine Mouth Coal so that businesses in the sector can be immediately rotated.
"There are a number of power plants in that type that are going to be procured. A number of these power plants are located in Sumatra and Kalimantan. If the result are published soon, it can definitely become a reference for investors in the coal and mine mouth power plant." He said to Bisnis, yesterday.
Mine Mouth Power Plants are plants built near the mine's location. As well as the mine mouth coals which is the closest point of discharge of that coal production plant.
Related to the formula for this type of coal, Nur evaluates that the price would be better by refering to the cost of production with the right additional rate of return so that it can be of interest to the investors. Previously, the Executive Associate Director of Indonesian Coal Mining Association Supriatna Suhala stated that his party has already held a meeting with the ministry of energy and mineral resources regarding the matter since 3 months ago. "From a number of suggestions, we are only requesting for fairness."
Supriatna explains that the price of coal for Mine Mouth Power Plant is better to be cheaper than the benchmarked coal price that has been set, because there are no additional cost of transport to the ship as well as other costs such as cost for loading and unloading.
Specifically for Benchmarked Coal Price, the price is referred to Freight on Board (FOB) on the coal-carrier ship for steam and cooking coals. Aside of the handover point, the price of coal must follow the Benchmarked Coal Price with the additional or reduction of certain costs that have been approved by the Ministry of Energy and Mineral Resources.
The delay in the finalization of the reference price affected a number of Power Plants' operational.
Among them is the Mine Mouth Power Plant Banjarsari with the capacity of 2x100MW owned by PT Bukit Asam Tbk that is located in Tanjung Enim.
PTBA and PLN had previously agreed upon the sales price of electricity from the Banjarsari's power plant at US$3.87 sen per kWh. That agreement was made on 2008. However, government plans on publishing the rules for coal price in mine mouth has delayed the sales agreement contract from being signed.
"If there are rules in mine mouth coal price, we request that the price will be matched according to the rules." said the CEO of PTBA Sukrisno in one opportunity.
CEO of PT Triaryani - Business Executor of Mine Mouth Power Plant - Teddy Setiawan agree so that the reference price of mine mouth coal can be published by the government so that it can become a reference to investors for investing in that sector. "This matter is just not settled. The easiest way for the reference price would be from the Indonesian Coal Index (ICI) minus 5%-10%)."
PT Triaryani, added, presently own a mine in Rawas Ilir, Musi Rawas, South Sumatra. The mine's potential reaches 400 million tons. "We are ready to exploit the mine." he said.
The Musi Rawas Coal Mine become an eco-friendly mine by practicing an International standard mining in the young coal mine sector.
Additionally, the company is also planning for the opportunity to sell Certified Emission Reductions (CER) that are produced from the activity of the Mine Mouth Power Plant.
In giving mining value to the ownership of the coal mine, Teddy explains that Iriaryani had work together with Korea Midland Power and another Korean company to join the procurement for the Power Plant SumSel VI with 2x300 MW capacity Project
The project is estimated to need an investment of US$800 million.
"We have passed the pre-qualification and will enter the procurement. From financial side, we have no problem. We have the capital ready internally as well as from our South Korean partners," he said.
Media Cetak Bisnis Indonesia By Firman Hidranto
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