ARTICLE · 12 MAY 2014

New regulation on mine-mouth power projects in Indonesia

Norton Rose Fulbright Australia

This new regulation was issued in April, focusing on the supply and pricing of coal for mine-mouth power projects.

IndonesiaInternational Law

Rick Beckman

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Introduction

The Indonesian Government continues to act on its policy of prioritising mine-mouth power projects.

In September 2013 we wrote that the Government was discussing a draft new regulation on mine-mouth power projects. The new ministerial regulation was issued in April, focusing on the supply and pricing of coal for mine-mouth power projects.

New coal price formula

The coal price for mine-mouth power projects will be determined on a case-by-base basis by the Director-General of Minerals and Coal. The coal price will be based on the floor price, taking into account price escalation. The floor price is production cost plus a margin, calculated on the basis of 25% of the total production cost.

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New regulation on mine-mouth power projects in Indonesia

Introduction

New coal price formula

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