Mining royalty rules can?t be changed: Govt

The size of the royalty to be paid by mining companies is already clearly mentioned in the contract of work and it can?t be changed, director general of coal and geothermal Simon Felix Sembiring said. This was reported in the Investor Daily Indonesia?s Monday edition.

Simon was responding to a demand by West Nusa Tenggara Governor Lalu Serinata to raise royalty from PT Newmont Nusa Tenggara to 4 percent from 2 percent.

?This rule is clear. Based on the value of the output from the mining, a 2 percent royalty must be paid. From this amount, 20 percent will go to the central government, 26 percent to provincial administration, 32 percent to regency where the company is located and 32 percent to all the regencies in the province,? Simon said on Sunday in Jakarta.

Simon admitted that he has yet to receive the official letter from West Nusa Tenggara provincial administration, which sought for the increase in royalty.

?I don?t understand what they are asking. If they want royalty to be increased, they should ask the finance minister or talk to us internally,? he said.

Earlier, West Nusa Tenggara Governor Lalu Serinata asked for an increase of 4 percent royalty from the total sales value. Its demand was based on the Government Regulation in 13/2000 regarding 4 percent of royalty on the total sales of the company. That?s why, the provincial administration has not given recommendation to PT Newmont to increase the total mining operational area to 200,000 hectares from 97,000 hectares.

Newmont public relations manager Kasan Mulyono said the rising demands for the increase of royalties must be seen from various perspectives, especially the comparison of competitive investment climate with other countries.

Any changes to the contract of work, including royalty, must be accepted by both the parties. (*)