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Sunday, 04 October 09
INDONESIAN COAL EXCHANGE FOR PRICE BENCHMARKING IN OFFING


Reuters cited Mr Bob Kamandanu chairman of the Indonesian Coal Producers Association as saying that Indonesia plans to set up a coal exchange to create a benchmark for coal prices which would help in pricing exports.

Mr Kamandanu said the association and the Jakarta Futures Exchange, which trades palm oil contracts, have held talks about setting up a coal exchange and aim to sign a memorandum of understanding by the end of the year. He said that “As a top thermal exporter, we need our own price benchmark.”

Mr Kamandanu said "The exchange may start with physical trading, followed by paper. But I think it will take one or two years for the market to mature.”

He did not give details, but he said the exchange may trade coal with a heating value of between 5,500 kilocalories per kilogram to 5,800 kilocalories per kilogram the most widely traded type of Indonesian coal.”

The government had already announced it would set up its own monthly coal price benchmark in order to reduce the practice of transfer pricing and reduce losses to the state.
Source: Steel Guru



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