APBI urges government to focus on illegal coal mining

By Tri Subhki R

Indonesian Coal Mining Association (APBI) urged the government to focus on cracking down on illegal coal mining rather than increasing royalty for coal miners.

"There are 50 million to 60 million tons of illegal coal in the market. It caused Rp3.5 trillion to Rp 4.5 trillion of loss to state revenue," APBI's Chairman Commercial Committee Pandu Sjahrir said on Wednesday.

The government is considering to increase coal royalty to 13.5 percent from the current 3 percent to 7 percent. The proposal aims to drive up state revenue to cap the widening current account deficit.

Pandu explained the crackdown on illegal mining is more urgent than increasing royalty. APBI's Chairman Bob Kamandanu confirmed that it is not the right moment to increase royalty, when the coal price is below US$100 a ton.

Director General of Mineral and Coal at Ministry of Energy and Mineral Resources Thamrin Sihite said the royalty rise is for the sake of national interest.

"This rule, indeed, will not satisfy everyone," Thamrin said, noting however, he will accommodate any input from coal miners' perspective.

Editing by Johannes Simbolon