Government warn miners to pay reclamation, post mining funds

By Tri Subhki R

Petromindo|Lucky

The Ministry of Energy and Mineral Resources warned miners to pay the so-called reclamation and post mining guarantee funds, otherwise they would not be given export permit.

Bambang Gatot Ariyono, the ministry?s Director General of Mineral and Coal, reiterated the call for miners to pay the financial obligation on Monday.

He said that only around 48 percent of miners in the country which have complied with the regulation to pay the funds, although the government has been promoting the regulation since the past several years.

"Now, we have to be strict. If miners do not comply with the obligation, we will not provide them with other permits, such as export recommendation (permit)," Bambang said.

According to existing Minister of Energy and Mineral Resources Regulation No 7/2014, miners are required to deposit reclamation funds into an escrow account for five years, and must be made in one payment.

Bambang told the House of Representatives Commission VII on mining and energy a few months ago that compliance by miners holding IUP mining license in paying the reclamation and post-mining funds has been quite low at around 40 percent of the total IUP miners.

He said that in contrast, compliance by larger coal mining firms holding the coal contract of work (or PKP2B) and mineral mining firms holding the mining contract of work (KK) has been quite good. In terms of reclamation funds obligation, compliance by PKP2B miners has reached 84 percent, while KK miners 88 percent. In terms of post-mining funds, compliance by PKP2B miners has reached 68 percent, while KK miners 83 percent.

Industry experts have said that the weak commodity price environment in recent years has been seen as one of the reasons for the low compliance. The requirement to deposit the funds for five years in advance has also created heavy financial burden to the mining firms.

Editing by Reiner Simanjuntak