MoF: No delay in coal royalty hike

By Bambang Atmaja

Despite protest from miners, Minister of Finance (MoF) Chatib Basri said that the government will press ahead with the planned increase in coal royalty which must be paid by coal miners holding the so-called IUP mining business permit.

He told Petromindo.com on Wednesday that the planned coal royalty hike has been included in the 2014 state budget plan.

The IUP holders currently pay royalty rate of 3.5-7 percent of net sales, depending on the calorific value of the coal, compared to the higher rate of 13 percent imposed on the holders of the so-called PKP2B mining contracts, which are mostly large miners.

Amid the current threat of declining tax revenue, the government has decided to increase the coal royalty of the IUP holders to between 10 and 13 percent, which has been protested by the miners in the wake of the current downturn in the global coal market. The Ministry of Energy and Mineral Resources reportedly has also suggested for a delay in the royalty hike.

Editing by Reiner Simanjuntak