Indonesia coal miners wary of proposed export duty

Indonesia’s coal industry is bracing for added pressure as the government considers reimposing an export duty on the commodity, the Indonesian Coal Mining Association (APBI) said.

Coal has not been subject to export duties since 2006, but President Prabowo Subianto’s administration is reviewing coal export governance, including the possible introduction of a levy.

APBI Executive Director Gita Mahyarani said the industry already faces multiple fiscal and non-fiscal charges along the production chain.

 “An export duty would potentially add further pressure on the industry,” she told Bisnis.com on Monday, adding that the measure could erode Indonesia’s competitiveness in global markets.

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The Finance Ministry told lawmakers on Monday that the proposal is still under discussion among ministries and agencies.

Febrio Kacaribu, Director General for Economic and Fiscal Strategy, said the government is weighing several factors, including Indonesia’s position as the world’s third-largest coal producer, continued exports of low-value raw coal, and declining benchmark prices.

The government is also assessing the levy’s potential to support downstream processing and decarbonisation efforts, Febrio said, adding that monitoring and inspection mechanisms are still being studied.

 “Coal remains the largest sources of tax and non-tax revenue for the state budget,” he told the House of Representatives Commission XI.

Editing by Reiner Simanjuntak