GOVT TO SET COAL PRICE MONTHLY

Jakarta, Oct 10 (ANTARA) - Director General for Mineral Resources, Coal and Geothermal Affairs, Bambang Setiawan said that the government would set the reference price of coal products in the country each month.

"The purchase contract of coals will later on be required to refer to the reference price," Setiawan said here on Friday.

The reference price will be made based a combination price of the Indonesia Coal Index (ICI), Barlow Jonker Index and Global Coal Index, he said.

According to Bambang Setiawan, the energy and mineral resources minister's regulation on the reference price and the domestic market obligation will be issued in November or December 2008.

For the on-going sale-purchase contracts, the government has called on parties involved to renegotiate them, Setiawan said.

"If the price of a contract refers to the Indonesia Coal Index, the price will be too far so that we are calling on the to renegotiate their contracts. And many of them have been following this," he added.

Bambang Setiawan said that a number of coal buyer countries such as Malaysia, Japan and South Korea have expressed readiness to renegotiate their coal purchase contracts.

However, the energy and mineral resources ministry's senior official said, buyers from European countries and the United States are asking that the contracts should be appreciated.

"This is a dilemma because if they are forced to do so it is feared that it would disturb the relations among the countries," Bambang Setiawan said.