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Govt cancels coal royalty hike

  • Thursday, March 20, 2014
  • www.petromindo.com

The government has finally decided to cancel the planned increase in coal royalty tariff of coal miners holding the IUP mining license amid the current weak price of the commodity, Bisnis Indonesia reported on Thursday.

The paper quoted Director General of Mineral and Coal R. Sukhyar as saying that the government could understand the current difficult situation faced by coal miners where the price of the commodity has tumbled. “But I’m asking all players to agree to adjust the royalty once the coal price recovers,” he said.

Sukhyar said that the planned revision of Government Regulation No 9/2012 on royalty will go ahead, but specifically for coal there will be clause stating that the royalty will be adjusted once coal price has recovered.

The government initially planned to increase the coal royalty tariffs of coal miners holding the IUP mining license to 10-13.5 percent from the current 3-7 percent. Sukhyar indicated earlier this week that the tariff hike would be effective next month.

On Wednesday, industry associations including the Indonesia Coal Mining Association (APBI), Indonesia Mining Association (IMA), and the Indonesia Mining Services Association (Aspindo) launched a final protest to the planned royalty hike, saying that it would undermine their business amid the current weak global coal market, and would lead to mining shut down and layoffs.

“According to our calculation, about a million of people will lose their jobs if the planned royalty hike is implemented,” said APBI Chairman Bob Kamandanu.

He said that the royalty can be increased if the coal price recover to US$100 per ton level.

Posted by : admin [ 3/20/2014 4:03:00 AM ]