Govt to set new royalty rates for coal production

The government is preparing a new regulation to set a new royalty rate for coal production in the country, Energy and Mineral Resources Minister Jero Wacik has said.

?We are still looking for the right formula for the new royalty. It means it should be good for both the government and coal mining companies,? he was quoted as saying by Investor Daily when giving his speech during the installation of the new board of executive of the association of coal miners (APBI) for the period between 2012 and 2015.

Director General of mineral and coal at the ministry, Thamrin Sihite said that at present there are two regulations for royalty ? one for holders of PKP2B contract of works issued by the central government and holders of IUP mining permits issued by local governments. The royalty rate for both is 13.5 percent.

In addition to royalty, the government will also issue a regulation so that all coal miners are required to sell part of their production to domestic market under the domestic market obligation (DMO).

At present, only holders of PKP2B contracts of works are required to comply with the DMO regulation. ?In the future, holders of IUP permits should also have the same responsibility, Thamrin said. (*)