Govt resume talks with ICMA on royalty hike plan

After announcing in March that the government decided to cancel the planned increase in coal royalty for coal miners holding the IUP mining business permit due to weak coal price, Director General of Coal and Mineral R. Sukhyar said that his office has now resumed talks with the Indonesian Coal Mining Association (ICMA) over an ideal royalty hike formula, Kontan reported on Friday.

He, however, said that the two sides have yet to reach agreement. While the government wants royalty to be increase once coal price has recovered to more than US$80 per ton, ICMA insists on the royalty hike to be applied only when price recovers to at least $100 per ton level.

The government has been planning to increase the coal royalty of the IUP coal miners from the current 3-7 percent rate (depending on calorific value) to reach as high as 13.7 percent, the rate applied to coal miners holding the coal contracts of work (PKP2B). (*)