Defiant coal miners finally pay guarantee funds

After several days of delays, five coal miners, which withheld their royalty payment worth Rp 3.36 trillion, have finally transferred Rp 600 billion in cash to the government?s accounts as a guarantee for the payment for their unpaid royalties, Media Indonesia reported on Monday.

The five coal mining companies include Bumi Resources? two subsidiaries PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, PT Berau Coal, PT Adaro Indonesia and PT Kideco Jaya Agung.

Didi Widayadi, the head of Development and Finance Comptroller (BPKP), which has been appointed to handle the royalty disputes, said that KPC and Arutmin Indonesia had transferred Rp 150 billion and Rp 100 billion, respectively through the Permata Hijau branch of Bank Mega.

Berau Coal had also transferred Rp 90 billion through the Gadjah Mada branch of Bank Niaga , while Adaro Indonesia and Kideco paid their guarantee funds worth Rp 150 billion and Rp 110 billion, respectively, through Bank Mega and Kedi Bank.

Didi also said that PT BHP Kendilo Coal had allocated about $6 million from its accounts in Bank of America in Singapore for the payment of the guarantee fund. ?The money will be then transferred to the Finance Ministry?s account, ? he said.

The six coal miners had agreed to settle Rp 3.36 trillion in unpaid royalties which occurred during period between 2001 and 2006 after the government promised that it would reimburse their value added tax (VAT) payment.

The tax dispute began in 2001 following the issuance of a new tax regulation which exempted coal from VAT payment. Consequently, the coal miners could no longer able to recoup their input VAT they had paid for the purchases of materials including mining equipment.

Earlier last month, government imposed a travel ban on 14 executives at the six coal firms for their refusal to settle the unpaid royalties. (*)