Pasir regency?s levies a burden for mining firms: APBI

The administration of Pasir regency in East Kalimantan has started imposing levies, like third party contributions, from 2006 on the coal mining companies operating in the regency. Several coal mining companies have complained about this policy, the Bisnis Indonesia newspaper reported in its Monday edition.

The new policy says the levy, which reached up to 5.7 percent of the total coal production of the company, must be paid to the local administration in the first five years and after that it should be evaluated every year based on the company?s performance.

A copy of the document regarding these third party levies say that they should be accepted by the company which has coal mining contract license.

?The company must give donation to the local administration in connection with the building and operation of roads and other facilities by the company,? read one of the articles of the document.

The rate for the donation was Rp 100 per square meter for building and for operation of the facility is Rp 600,000 per kilometer and at the time of production , it should pay 4.5 percent of the total production to the local administration.

Besides this, the company has to pay Rp 1,000 per ton for stock piling and for the unloading at a rate of Rp 1,000 per ton. The ships that carry coal also must pay Rp 250 per gross ton for each day.

Indonesian Coal Mining Companies Association (APBI) chairman Jeffrey Mulyono said the initiative of the local administration is a disincentive for the mining sector. For this, the organization has already complained to the director general of coal and geothermal energy Simon Felix Sembiring.

?Watching this initiative (by the local government), we request director general to facilitate the local government not to discourage the international investors to invest in the coal mining sector,? the letter that was sent to the director general said.

Jeffrey said the levies reached 5.7 percent of the total production of a company, or the same with the royalty to the government. (*)