Rise in royalty for mineral products proposed

House of Representatives (DPR) working committee for the mining bill on mineral and coal resources has proposed the rise in royalty for mineral products such as gold, silver and copper as the current royalty of 1 percent is deemed too small.

 

The House Commission VII head Airlangga Hartarto said in Jakarta Wednesday that the government and DPR have agreed on the inclusion of the clause on the royalty increases into the mining bill.

 

“The percentage of the royalty increase is being discussed by the working team of the mineral and coal bill. Technically, it might be formulated in the government regulation,” Airlangga said.

 

Airlangga asserted that besides mineral resources, the working committee also discussed the possibility to revise downward the coal production share payable by coal contractors. Currently, coal contractors submit 13.5 percent of the sales of its output the government. The amount called "Coal Production Funds" include royalty. 

 

"There is an idea to lower that the Coal Production Funds for contractors producing low-calorie coal," Airlangga said. 

 

Meanwhile, the Indonesian Mining Association’s (IMA) chairman Arief S. Siregar warned that the government should be careful in revising the clause on royalty as this will become a boomerang that will worsen the investment climate.

 

“The government and DPR should find ways of how to make the investment climate more attractive, not to put more burdens on investors,” he said.

 

Chairman of the Indonesian Association of Coal Mining Companies (APBI) Jeffrey Mulyono urged the DPR to enact the mineral and coal bill to ensure legal certainty and help create climate conducive to business.

 

On license, he said, players of mineral and coal business still prefer the contract of work (CoW) system. (godang)