Coal royalty to be set at a single tariff of 13.5%

The government plans to introduce a coal royalty tariff of 13.5 percent as part of a planned revision of Government Regulation No 9/2012 on type and tariff of non-tax state revenue, Investor Daily reported Friday.

Director General of Mineral and Coal R. Sukhyar said that the proposed royalty changes would be further discussed with the Coordinating Minister for the Economy. He said that applying a single royalty rate is aimed at ensuring fairness.

Under the current system, coal miners holding the so-called IUP mining business permit are subject to a royalty tariff of between 3-7 percent, depending on the calorific value of the coal, while miners holding the PKP2B permits are already subject to the higher royalty of 13.5 percent.

Supriatna Suhala, Executive Director at the Indonesian Coal Association (APBI), said that increasing the tariff of royalty for the IUP coal miners would pose a huge burden for them amid the current downturn in the global coal market. He added that the lower royalty tariff was introduced by the government as incentive for miners to develop the country?s low calorific coal reserves. (*)