Indonesia postpones coal royalty rise

THE Indonesian government has postponed plans to raise coal royalties due to strong resistance from small and medium-sized miners claiming it was an extra burden while prices were low.

Sadie Davidson

Indonesian miners met energy ministry officials this week to state their opposition to the plan to raise coal royalty payments to 13.5% from the current 3-7%.

Low prices, a declining imported coal market in China and intense competition to sell coal in India were all factors that brought about the suspension.

The plan to raise royalties has been postponed and passed onto the Coordinating Ministry for Economic Affairs for consideration.

However, the delay is believed to be temporary, with the rise to 13.5% likely to take place before the end of the year.

Many small and medium-sized miners fear the delay will not go far enough to enable the market to recover before placing further pressures on the small-scale producers in the tin industry.

Major Indonesian coal companies currently pay 13.5% coal royalty, while small and mid-sized producers pay between 3% and 7%.

The proposal is to impose a uniform coal royalty of 13.5%.