ICMA protests obligation to use rupiah

By Tri Subhki R

The Indonesia Coal Mining Association (ICMA) protested the new central bank requirement for the use of the rupiah in domestic transaction as stipulated under Bank Indonesia Regulation No 17/3/PBI/2015. ICMA said that the new regulation, which will officially be effective on July 1, 2015, may be counterproductive.

"The regulation may further depress the coal mining industry. We urge the government to review the regulation and involve the stakeholders in policy making," ICMA Chairman Pandu Sjahrir said on Monday.

Many coal miners and mining contractors are using the US dollar in financing their mining operations including for buying fuel and heavy equipment.

ICMA said it has officially filed its objection on the central bank regulation. Pandu added that the regulation may increase the country?s investment risk profile, discouraging foreign investment.

"The important thing currently is encouraging investment in the coal mining industry among others in the development of mine mouth power plants," he said.

Editing by Reiner Simanjuntak