Indonesia’s decision to force coal exporters to adopt a government-set benchmark price has rattled Chinese firms – its biggest customers – and triggered warnings that the move could erode Jakarta’s edge in the global market.
The regulation went into effect in March, after Indonesian Energy Minister Bahlil Lahadalia announced that coal exporters would need to start using the government’s benchmark price, known as Harga Batubara Acuan (HBA).
Bahlil said using the HBA would ensure that Indonesian coal was not sold internationally at prices below the local benchmark, as independent pricing agencies had significantly reduced their rates compared to Indonesia’s benchmark.
Historically, the government used the HBA to determine royalty fees for coal miners, while the Indonesia Coal Index was used in pricing transactions. The new policy would mean that international sales would need to align with the HBA.
The Indonesian Energy, Mineral, and Coal Suppliers Association (Aspebindo) welcomed the move, with its deputy chairman Fathul Nugroho saying that adopting the HBA price would give Indonesia greater control over its coal pricing in the global market.
“Using HBA will better reflect rising mining costs, including increasing stripping ratios, land acquisition expenses, and fuel prices,” Fathul said when the regulation was announced at the end of February.
