Govt's coal share will no longer be paid in cash

The government will require coal mining companies to pay its 13.5 percent production share in kind to secure supplies for domestic market.

 

“The government's 13.5 percent share, which comprise royalty (6 percent) and mandatory funds for coal mining development (7.5 percent), should be paid in the form of coal, not in cash,” Farida Zed, the secretary of the directorate general of mineral, coal and geothermal resources at the ministry of energy and mineral resources, said on Monday.

 

Jeffrey Mulyono, chairman of the Indonesian coal mining associations (ICMA), said that originally mining companies had been  obliged to pay the government's 13.5 percent share in kind, but later the government wanted the share to be paid in cash.

 

"If the government wants to reimpose the system, we are ready," Jeffrey said

 

According to data provided by ICMA, Indonesia's coal production reached 168 million tons in 2006. About 123 million tons of the total were exported and the remaining were sold in the domestic market.

 

The association estimates that the country's coal production will increase to about 183 million tons this year. Of the total, about 134 million tons will be exported and the remaining 49 million tons will be sold in the domestic market.

 

In 2010, the country's production is expected to further increase to 240 million tons. About 150 million tons of the total will be exported. (*)