Bukit Asam to Trade Coal Through JFX

A worker of state-coal miner PT Bukit Asam 

cleans a conveyor belt at a port in Lampung province 

in this August 20, 2011 file photo. 

(Reuters Photo/Dwi Oblo)

Jakarta. State-controlled coal miner Bukit Asam has teamed up with Jakarta Futures Exchange (JFX) to sell its coal supply to the overseas market.

As part of the agreement, the Jakarta-based company has agreed to put up 75,000 metric tons of its coal — scheduled for September delivery — to be offered through local exchanges. The sale would mark the first physical coal contract to be traded in the JFX.

The offering will be divided into two tranches; the first will involve some 60,000 tons of coal with a calorific value of 6,450 kilocalories per kilogram and is scheduled for shipment through Tarahan port in Lampung province.

The second tranche includes 15,000 metric tons of coal with a calorific value of 6,300 kilocalories per kilogram, to be delivered to Kertapati port in South Sumatra.

Trading through JFX is expected to be more transparent and efficient compared to the conventional method, said Milawarman, president director of Bukit Asam.

He added that the company can only commit to sell a small portion of its coal output through the local exchange as most of its production volume for this year had already been contracted.

“But of course we look to sell more through the exchange, maybe to the point similar to our export volume.”

Bukit Asam sold 24.7 million metric tons of coal last year, of which around 50 percent was for overseas market.

Sutriono Edi, head of the Commodity Futures Trading Regulatory Agency, confirmed Bukit Asam’s decision was in line with the government’s push to make domestic commodity exchanges more active and involved in price discovery.

“We seek to push domestic exchanges for algae and rubber in the future.”

Indonesia has two domestic exchanges, the second being the Indonesia Commodity and Derivative Exchanges (ICDX).

Bihar Sakti Wibowo, a director at JFX, said the exchange is looking to add physical contracts of cacao and coffee beans to its product portfolio.

By Tito Summa Siahaan on 08:25 pm Jul 01, 2014