Coal Export Ban May Trigger Force Majeure

By Editorial Team 06/01/2022
Coal Mining
Summary

State-owned coal miner PT Bukit Asam Tbk (PTBA) anticipates the impact of the coal export ban, which may lead to force majeure. PTBA Corporate Secretary Apollonius Andwie said the company had prepared a force majeure clause in every sale and purchase contract. According to this clause, if the worst-case scenario of force majeure occurs, PTBA will be released from all obligations and responsibilities during the situation. Under the clause, the force majeure releases the company from violating the sale and purchase agreement.

Based on a disclosure filing to the Indonesia Stock Exchange (IDX) on Wednesday, PTBA management said that, under a force majeure, PTBA as a seller is released from all obligations and responsibilities as long as the situation is not considered a violation of the terms of the agreement. PTBA views the coal export ban contained in the Director-General of Mineral and Coal Letter Number B-1605/2021 as a force majeure so that the company believes there is no default arising from the agreements between the company, its subsidiaries, and buyers.

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