Coal miners asked to pay royalty in full

The Ministry of Energy and Mineral Resources has asked coal miners holding the first, second, and third generation of the coal contracts of work (PKP2B) to pay royalty via in-cash mechanism instead of the usual in-kind mechanism, Kontan reported on Monday.

The paper quoted Director General of Mineral and Coal at the ministry, Bambang Gatot as saying that by paying the royalty through in-cash mechanism, the government will be ensured to get the revenue in full.

He added that there is no need for regulatory changes to apply the in-cash mechanism, as it has been part of negotiation between the government and miners to amend their mining contracts.

Bambang also said that 10 PKP2B holders had late last week agreed on the amendment of their contracts, and accepted the in-cash term proposed by the government.

Miners have applied the in-kind mechanism, paying the coal royalty to the government after deducting various expenses including marketing, thus depriving the government from receiving the proceeds in full.

Meanwhile, Hendra Sinadia of the Indonesian Coal Miners Association (APBI) said that during the renegotiation process of the PKP2B contracts, particularly the first generation, miners had expressed objection to the in-cash mechanism. (*)