KPC wants a reduction in royalty payment

PT Kaltim Prima Coal, a major coal mining company based in East Kalimantan, has proposed to the government for a reduction in its royalty payment due to an extra cost the company has to pay to the province's Kutai regency, Investor Daily reported on Friday.

KPC's Finance Director Eddie J. Soebari said in Jakarta on Thursday that the mining company had to pay in every three months an extra cost of about Rp 126 million in transportation levy and another Rp 4 billion in tax payment for the excavation of its coal port.

"We want to stick to the existing contract under which we are obliged only to pay royalties. There is no requirement that we also have to pay the transportation levy and the excavation tax," he said.

Eddie said that KPC had asked the government to reduce the royalty payment in a bid to offset the high extra cost that had to pay by the company to the Kutai regency.

Meanwhile the director for coal mining at the ministry of energy and mineral resources, Bambang Hartoyo said that the government had turned down KPC's proposal to reduce the royalty payment.

"The government rejects the proposal because the requirement to pay the royalty is clearly stated in the contract," he said. (*)