Coal miners required to develop processing facility

The government has included the obligation for coal miners to generate greater value added from the commodity through domestic processing in the current amendment of their mining contracts, Kontan reported on Tuesday.

The paper quoted Director General of Mineral and Coal R. Sukhyar as saying that the government was currently drafting the regulation to implement the coal processing obligation.

Under the planned policy, current practices of coal washing and crushing are not considered as value added process. Therefore coal miners must opt either to build coal upgrading facility, coal liquefaction or coal gasification.

As has been reported earlier, the government has agreed with nine coal mining firms holding the so-called coal contracts of work, or PKP2B, on the draft of the amendment of the contract.

Sukhyar said that there are six main points of the contract amendment including on the coal processing obligation. ?On coal value added, the content of the contract says that the company must support government efforts to generate greater value and coal processing,? he said.

The amendment of mining contract is mandated by the 2009 Mining Law as the country wants to generate greater benefits from mining commodities. The government has issued Regulation No 77/2014 on the domestic processing obligation of miners.

The government introduced an export ban policy on mineral ores in January of last year, requiring miners to develop domestic smelters to refine the ores before exporting them. (*)