South Kalimantan?s regency claims royalty paid by Adaro too small

A councilor of the Hulu Sungai Utara regency in South Kalimantan complained that the royalty received by the regency from coal mining company PT Adaro Indonesia was too small, South Kalimantan-based daily Banjarmasin Post reported Tuesday.

Councilor Morhan HK, who had recently made a comparative study to South Sumatra, said Monday that state owned coal mining company PT Bukit Asam, which is based in the Muara Enim regency, South Sumatra, had paid a larger amount of royalties to Muara Enim than the ones paid by Adaro to Hulu Sungai Utara. This is despite the fact that the coal output of the state coal company was lower than Adaro?s.

He said Bukit Asam with the production of 6.5 tons per year paid Rp 16.4 billion in royalties per year to Muara Enim. The company had even built a hospital for the public in the regency.

Adaro with an annual output of 16 million tons only pay Rp 16 billion in royalties to Hulu Sungai Utara, he said.

?I was surprised to find that the Maura Enim regency receives a significant amount of royalties despite the fact that coal production in the area is not very big,? Morhan said.

In response to the complaint, Adaro?s official Yunizar Andreansyah said the company had paid the royalties in accordance with the existing regulations.

He said it was reasonable that Bukit Asam paid a larger amount of royalties given its status as a state owned company. Adaro is a foreign investment company.

?As the two companies have different status, they also have different obligations,? he said, adding that the amount of royalties payable by the company was set by the government which invited the firm to invest in the area.

He said he did not know the amount of royalties received by Hulu Sungai Utara because the company delivered all the royalties to the government, which then distributed some of the royalties to the regency. (*)