Benchmark Price Formulae Regulation

AuthorWilliam A. Sullivan/Christian Teo Purwono & Partners
ProfessionLicensed Foreign Advocate in Indonesia as well as a Solicitor of the Supreme Court of New South Wales
Benchmark Price Formulae
I. Executive Summary
1. Overview
The Benchmark Price Formulae Regulation (hereinafter referred to as
DGoMCR 515/2011) was issued with legal effect from March 24, 2011, and
by way of the implementation of Articles 11(4) and 19(3) of MoEMRR 17/2010.
2. Approach
2.1 Determination: DGoMC determines, each month, the Coal Bench-
mark Price for (i) Steaming Coal and (ii) Coking Coal based upon the
applicable formula that refers to the average coal index price as deter-
mined in accordance with the international price mechanism and/or at a
price that is generally applicable in the international market.
2.2 The details of each of the formulae for determining the different Coal
Index Prices are set out in the Appendices to DGoMCR 515/2011.
2.3 The Coal Benchmark Price must be used by holders of Production
Operation IUPs, Production Operation IUPKs, and CCoWs as a ref-
erence in determining the selling price of coal.
2.4 Coal Indexes: There are two types of Coal Index Prices as follows:
a. Steaming Coal Index Price; and
b. Coking Coal Index Price.
2.5 The formula for determining the Steaming Coal Index Price also
applies as the formula for determining the Steaming Coal Benchmark
Price for Primary Coal and Other Coal.
2.6 Term Sales: In the case of term sales, the Coal Benchmark Price is
determined based on the average Coal Benchmark Price for the three
months prior to the date of the contract between the buyer and the seller.

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