New Indonesian Coal Policy To Increase Prices For Indian Companies.

NEW DELHI: A new Indonesian policy that stipulates benchmarking of coal prices to international market rates is likely to increase the cost of coal imports from that country for Indian firms, Parliament was informed on Wednesday.

"The regulation is likely to increase the price of coal in case of projects using imported coal from Indonesia," Minister of State (MoS) for Coal Pratik Prakashbapu Patil said in a written reply to the Lok Sabha.

He added that "the impact on the tariff of such projects may vary, depending upon the quality of imported coal and fuel mix".

The September 23, 2010, regulation ratified by the government of Indonesia stipulates the benchmark price for coal sales, Patil said while replying to a question on whether the new law makes it mandatory for all parties to sell coal at the prevailing international market rates.

The MoS for Coal further said that it stipulates for adjusting within 12 months the contracts negotiated/finalised prior to enactment of the regulation, which implies that the new rule will apply to all contracts retrospectively.

Indonesia was India's largest source for imported coking coal in FY2009-10, accounting for 31.959 million tonnes out of the total imports of 48.56 MT, Patil added.

Source : economictimes.indiatimes.com