Golkar Party proposes ?depletion allowance? of US$1 per ton of coal

The Golkar Party faction at the East Kalimantan provincial legislative council proposed the imposition of depletion allowance of US$1 per ton of coal produced in the province in a bid to boost the revenue of the administration, the local Radar Kaltim daily reported Thursday.

The paper quoted head of the Golkar faction Fauzie Ahmad as saying that coal mining companies must pay the allowance because coal was considered as a non recoverable natural resource.

He said that such a policy would boost the provincial administration revenue. He pointed out that there were currently 12 coal mining companies operating in the province, which produced some 37.81 million tons of coal in 2000.

He said that the policy would be much better than the current effort to acquire a 51 percent stake in the giant coal mining company PT Kaltim Prima Coal (KPC).

The local government had been involved in the negotiation talk for the KPC stake for about two years now, raising criticism that the administration and some lawmakers had been spending too much time and energy to acquire KPC.

Following the implementation of the autonomy law in 2000, regional government is allowed to fully manage their own economic affairs including taking measures to boost revenue.(*)