Regulation on national coal reserve will be issued soon

The government will soon issue a regulation requiring coal mining companies to allocate part of their production to the government for a national coal reserves.

Coordinating Minister of Economy Aburizal Bakrie said in Jakarta on Monday that under the regulation, which is under completion, export-oriented coal producers would be required to give 13.5 percent of their production to the government for the country's national coal reserves.

He said that the regulation would be needed to ensure significant coal supply to meet the growing demand in the domestic market. "It is why the coal exporter should provide coal not in the form of money," he said.

Aburizal, however, did not explain if the coal to be given to the government would be part of the royalties that have to be paid by coal miners or another form of payment. But he said that such a regulation was needed because most of coal miners preferred to sell their coal overseas due to more favorable prices.

According to Aburizal, the national coal production is expected to reach 30 percent of the country's total production by 2010. (godang)