Holders of IUP mining permits will pay 13% royalty

Mining companies holding IUP permits will be required to pay royalty at 13 percent of their net sales to the government, the same amount currently paid by holders of PKP2B mining permits, Bisnis Indonesia reported on Friday.

Thamrin Sihite, Director General of Mineral and Coal at the Energy and Mineral Resources Ministry, said in Jakarta that the plan was part of the government?s program to synchronize the royalty payment at the mining industry.

At present, holders of IUP permits which are issued by local governments pay 7 percent royalty, while holders of PKP2B permits, which are issued by the Energy and Mineral Resources Ministry, pay 13 percent royalty.

Thamrin said that the synchronization of the royalty payment would be made to ensure fair playing grounds for all the country?s coal miners. ?They have the same production and the same responsibility in managing the environment,? he said.

But, before introducing the new royalty rate, the government would first ensure that all miners pay their unpaid royalty obligation in order to increase the government?s non tax revenues, he said.

At present, many companies delayed their royalty payments. (*)