Govt may lower royalty for underground mining to attract investors

The government plans to offer a lower royalty rate to attract investors to conduct underground mining in the country, a senior official at the Energy and Mineral Resources Ministry has said.

Thamrin Sihite, Director General of Mineral and Coal at the ministry said in Jakarta on Tuesday that a lower royalty for underground mining activities was being considered as such mining operations were generally more costly and required high technology. He said that despite a lower royalty incentive, however, investors involved in underground mining operations should still abide by the other existing regulations including the domestic market obligation which requires miners to sell a part of their production in the domestic market.

Meanwhile, director of coal business enterprise at the directorate general of mineral and coal, Bambang Gatot Ariyono, said that the government would invite Japanese investors to develop an underground mining in the country.

He also said that besides inviting Japanese investors to open up underground mines, the Indonesian government would also cooperate with the Japanese government to jointly conduct training on underground coal mining in the country.

Bambang said many parts of East and South Kalimantan were considered as potential locations for underground coal mining due to the special characters of the geology structures in the two provinces. (giok)