New royalty to be based on coal calorie

New royalty currently being prepared by the government will be based on the quality or calorie of coal the mining companies produce, Kontan reported on Monday.

The acting chairman of the fiscal policy agency at the finance ministry, Bambang Brodjonegoro said in Jakarta last week that the new royalty scheme would be imposed on holders of IUP coal permits.

?The different royalty scheme will be issued to ensure fairness to the country?s coal producers,? he said. ?Under the new system, the royalty will be based the calorie of coal they produce,? he added.

At present, coal producers which hold IUP permits issued by the local governments, are required to pay royalty at 7 percent of total production. Meanwhile, coal miners which hold contract of works (KK) and PKP2B permits, issued by the central government, are required to pay royalty at 13.5 percent of their total production.

Bambang said that the royalty rate for holders of IUP permits would be also increased because it was still too low. But, he refused to elaborate on the planned royalty increase. (*)