Colombia’s Mining Regulatory Agency Selects Argus Coking Coal Price Assessments
Colombia’s mining regulatory agency, Agencia Nacionál de Mineria (ANM) has started pricing coking coal for royalty calculations using price assessments published by global energy and commodity news and price reporting agency Argus. This expands Colombia’s innovative use of market-based tax calculations to the coking coal sector and is joined by enhanced use of Argus indexation in the thermal coal tax formula.
Colombian authorities will begin using Argus fob Colombia coking coal price assessments to calculate market values for export shipments from the country’s coal mines. Colombia’s market-based pricing will benefit all stakeholders in the country’s coal industry during a period of historically low prices. The Colombian program will provide relief for producers while coal prices are low, keeping these industries competitive in international markets. It should also ensure that the Colombian sector benefits when coking coal prices recover.
Argus publishes these fob Colombia coking coal price assessments, which Latin America’s coal markets have rapidly adopted for price indexation. The assessments are published in Argus Steel Feedstocks, a service covering coking coal, iron ore and ferrous scrap markets around the world.
Argus freight assessments have also been incorporated into Colombia’s coal royalties for thermal coal produced in the central region of the country, joining the Argus/IHS McCloskey API 2 index for this calculation. Argus’ assessment of Panamax rates from Colombia to Rotterdam will be used to calculate a netback price from the northwest Europe trading hub. These freight assessments are available in Argus Coal Daily International and Argus Freight.
“Argus price assessments are used extensively by governments as independent references for taxation and other purposes,” Argus Media chairman and chief executive Adrian Binks said. “We fully expect other growing and liberalising economies in Latin America to take similar steps in the near future.”
Colombia is one of the top coal exporters in the world, and is the third-biggest exporter of coking coal in the Americas. Coking coal is used to make metallurgical coke, which is a feedstock in primary steel production.
Argus coal price assessments are widely used in physical and derivative contracts around the world. Its transparent price assessment methodology has been increasingly adopted throughout the Americas and globally. Argus price assessments are used by major energy producers and consumers as price references in long-term supply contracts, and by market participants for portfolio mark-to-market, counterparty exposure management, derivatives and a wide range of investment and market analysis purposes.