33 coal mining firms pull out due to overlapping regulations
Tuesday, August 20 2002 - 03:36 AM WIB
The secretary general of the association of Indonesian coal mining companies (APBI), Jeffrey Mulyono, said in Jakarta on Monday that the issuance of the government regulation No: 144/2000 which changed the status of coal products from taxable goods to non-taxable goods was one of the reasons why the mining companies had cancelled or pulled out their investment plans.
"Being considered as the producer of non-taxable goods, their imported goods are no longer exempt from Value Added Tax. This has caused an increase in their investment costs by between 6 percent to 10 percent," he added.
According to Jeffrey, the change in the tax status of coal products has practically removed all the tax incentives given to coal mine operators. He added that the association had gained support from several related institutions to remove the regulation No:144/2000.
The institutions which supported the removal of the regulation included the office of the Coordinating Minister of Economy, Minister of Energy and Mineral Resources, and some members of the House of Representatives (DPR).
Meanwhile PT Gag Nikel Indonesia, a joint venture between PT Antam Tbk and BHP of Australia, still faced difficulties to realize the development of its massive nickel mining project in Gag island, Papua, formerly known as Irian Jaya.
The company, which had spend about US$50 million in feasibility study, was still waiting for the recommendation letter from DPR before realizing the massive nickel-mining project, which according to the new forestry law overlapped with protected forest areas.
The new forestry law bans open-pit mining operations in the forest conservation areas. This has caused PT Gag and several other mining companies which received their mining contracts in some protected areas before the issuance of the law to stop their operations. (*)