Government to press ahead with coal royalty hike plan

The government will press ahead with its coal royalty hike plan this year despite protest from industry players, Director General of Mineral and Coal R. Sukhyar.

Sukhyar was quoted by bisnis.com as saying that the royalty hike is needed to help meet the higher non-tax revenue target set in the 2015 state budget.

?If not, we would not be able to collect non-tax revenue (as targeted) in 2015,? Sukhyar said Thursday.

The government plans to increase the royalty of coal miners holding the so-called IUP mining business permits from the current tariffs of 3, 5, and 7 percent to 7, 9, and 13.5 percent, depending on the calorific value of the coal (the higher the CV, the higher the tariff), by amending Government Regulation No 9/2012.

The Indonesian Coal Miners Association (ICMA) has opposed the plan considering the current drop in coal price. The association has suggested for the government to make the royalty hike when the government?s coal price benchmark HAB has recovered to the US$100 per ton level. (*)