?Depletion allowance? proposed to replace acquisition of KPC stake

The faction of the Golkar Party at the East Kalimantan provincial legislative council has proposed a ?depletion allowance? retribution as an alternative to acquiring the stake of coal mining giant PT Kaltim Prima Coal (KPC) which proves to be a difficult and long process.

Deputy speaker of the council Kasyful Anwar said that based on the depletion allowance concept, every metric ton of coal produced in the province would be subject to a local retribution tax of US$1.

According to him the depletion allowance retribution could also be expanded to other irrecoverable natural resources exploited in the province.

Kasyful said that this would become a source of revenue for the local administration. He added that this was a better alternative than pursuing for the acquisition of the KPC shares which had been going for around two years but without concrete result.

KPC is obliged to divest up to 51 percent stake to the East Kalimantan administration. But negotiation process has been moving at a snail?s pace. Currently, the two sides are still negotiating for the share price.

Several provincial lawmakers including Kasyful and another deputy speaker Khairul Fuad have complained about the long hours and much energy spent to the KPC issue, but without result. The two also criticized the council?s special team on KPC which had played an active role in the negotiation process. Kasyful said that the negotiation should be handled by the executive, not the legislative. He pointed out that the role of the special team was only to monitor the process.

Elsewhere, Kasyful said that the Golkar faction planned to hold a seminar on the depletion allowance concept sometime in the near future in a bid to disseminate the concept to the public.(*)