ICMA opposes new royalty hike plan

The Indonesian Coal Mining Association (ICMA) has opposed the new coal royalty hike plan as it would ?kill? many miners amid the current industry downturn.

According to the new formula, the government will increase the royalty rate once the HBA coal price reference, which is published by the government, reaches US$80 per ton.

?If the threshold is that low, many coal miners will be killed,? ICMA Chairman Bob Kamandanu told Kontan.

Bob said that miners do not oppose the planned increase in coal royalty, but said that the ideal price threshold is at $100 per ton. This means that if the HBA price remains below $100 per ton, the current royalty rates of 3, 5, and 7 percent, respectively for low, medium, and high calorific value coal remain unchanged.

The government plans to increase the royalty rate of coal with calorific value of below 5,100 kcal/kg to 7 percent, coal with CV of between 5,100-6,100 kcal/kg to 9 percent, and coal with CV of more than 6,100 kcal/kg to 13.5 percent. (*)