Because of illegal mining, Rp 160b in royalties lost in S. Kalimantan

Because of rampant illegal mining activities in South Kalimantan, the government has lost Rp 160 billion in potential coal royalties.

According to data at the customs and excise office, state-owned port operator PT Pelindo III in Banjarmasin and local administration, the realization of coal sales in the province reached 16.93 million tons in 1998.

The government should have got 13.5 percent of the total sales revenue.

Based on the audit by the Supreme Audit Agency (BPK), 8.63 million tons of coals sold in the province in 1998 were those mined illegally.

With average coal prices of US$10 per ton in 1998, and an average rupiah's exchange rate of Rp 7,000 per U.S. dollar, the lost potential income from royalties totaled Rp 81.592 billion. In 1999, the lost potential income from royalties was projected to reach Rp 78.418 billion.

Meanwhile, most of illegal coals are stockpiled with the knowledge of local administrations. As of Sept. 27, 1999, BPK found 99 stockpiles of illegal coals - out of 115 stockpiles in South Kalimantan.

Most illegal miners mine coal from concessions belonging to established companies that have the license to mine coals in the concession areas.

Uncontrolled illegal mining activities in South Kalimantan have reached alarming level, and need to be addressed as such activities have destroyed the environments, according to BPK.

Therefore, BPK calls on the Ministry of Mines and Energy to intensify efforts to localize and eventually prevent illegal mining activities, by imposing severe sanctions against illegal mining activities. (*)