Kartini L Makmur, Jazmi Adlan Bohari
The Government, through the Ministry of Energy and Mineral Resources (ESDM), is preparing a plan to increase coal royalties. Under the ongoing evaluation, the increase will be imposed on all mining companies that hold mining permits (IUP).
R. Sukhyar, Director General of Mineral and Coal at the ESDM, said that the declining price of coal has become an obstacle in determining how much royalties should increase. He also stated that
Government Regulation No. 9 of 2012is also hampering efforts to increase Non-Tax State Revenue.
This regulation provides that royalties to be paid to the Government by IUP holders will be 3.5–5 percent. However, under the current Coal Mining Agreement ( PKP2B), IUP holders must pay 13.5 percent.
“We intended to generalize the royalties as stated in PKP2B at 13.5 percent. However, with the coal prices declining, we should see what impact this will have on IUP Holders,” Mr. Sukhyar said.
Further, Mr. Sukhyar stated that the current assessment will also take into consideration inputs and recommendations from mining companies. While the Indonesian Coal Mining Association has
declared its objection on the increase,Mr. Sukhyar encouraged the Association to be supportive on this issue.
“When the coal price is up, they are never this loud,” he complained.
Yusuf, an expert on mining and metallurgy, has emphasized that the Government needs to be rational and transparent during the evaluation to increase the coal royalty. Yusuf asserts that it is unfair for contractual and PKP2B companies to be hit with a 13.5 percent levy while IUP holders only have to pay 3.5–7 percent.
“If there is a plan to increase the royalty rate, it should be open, fair, rational, and discussed by all related parties,” Mr. Yusuf concluded.
Mr. Yusuf also proposed that higher royalties should be imposed on mining companies that fail to implement good mining practices. In fact, he went as far as to suggest the Government should terminate their mining activities.
(hot/kc)