East Kalimantan reviews increase in coal miners’ community development funds

The East Kalimantan provincial government is reviewing a gradual increase in the Community Development and Empowerment Program (PPM) funds paid by coal mining companies, from the current Rp1,000 per metric ton of coal production, to optimize development in communities around mining areas.

“We have conducted this review together with Mulawarman University because the Rp1,000 rate, which has been in place for nearly 10 years, is no longer sufficient to optimally support community empowerment,” Head of the East Kalimantan Energy and Mineral Resources Office Bambang Arwanto said in Samarinda on Sunday, as quoted by Antara.

Bambang said the study on increasing the social contribution involved active participation from local communities, company management and the government.

“This policy will certainly become a new cost for mining companies, so its implementation must be discussed gradually and very carefully,” he said.

The government has already held an initial socialization meeting in  Jakarta regarding the proposed increase in the social fund.

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Further discussions will be carried out in more detail based on company clusters, particularly firms holding Special Mining Business Permits (IUPK).

Based on the technical study, the provincial government has proposed a phased increase to around Rp3,000–Rp5,000 per metric ton.

“The proposed figures were influenced by coal prices that had previously surged due to geopolitical tensions and war,” Bambang said.

Meanwhile, East Kalimantan PPM Forum chairman Muslim Gunawan said an ideal level that would not overly burden company operations is currently around Rp1,200 per metric ton.

 “The process of adjusting the PPM tariff is expected to take longer due to price corrections caused by declining overseas demand for coal,” Muslim said.

The weak global market has also affected coal mining companies’ 2026 Work Plan and Budget (RKAB), which on average have been cut by 40% to 80%.

Despite the challenging market dynamics and economic pressures on companies, the government said the review process for increasing PPM contributions will continue.

Editing by Reiner Simanjuntak