Govt plans incentives for coal mining activities<\/p>\n
JAKARTA (JP): The Ministry of Mines and Energy plans to
\nprovide new incentives to encourage the development of low
\nquality coal in remote areas.<\/p>\n
Director General of Mines Rozik Boedioro Soetjipto said on
\nTuesday the planned incentives would include the introduction of
\nlower royalties for coal mining activities.<\/p>\n
He said mining companies had complained that the current
\nroyalty payment imposed by the government was prohibitively high
\nand prevented them from developing low quality coal in remote
\nareas.<\/p>\n
\"The planned royalty scheme is expected to give opportunities
\nto coal mining companies to gain enough profit from the
\ndevelopment of this kind of coal amid the slump in coal prices,\"
\nRozik said on the sidelines of the shareholders meeting of
\npublicly listed state mining company PT Aneka Tambang.<\/p>\n
Under their contracts, coal mining companies are currently
\nobliged to hand over 13.5 percent of their coal output in
\nroyalties to the government.<\/p>\n
Industry sources said coal prices had fallen to about US$25
\nper ton for high quality coal in regional markets due to the
\neconomic crisis which hit the region in mid-1997, as against $40
\nper ton prior to the crisis.<\/p>\n
Low quality coal is currently sold at between $10 and $20 per
\nton.<\/p>\n
Rozik said the study made by the Agency for the Assessment and
\nApplication of Technology indicated that developing low quality
\ncoal in remote areas was currently unprofitable.<\/p>\n
The agency, together with a foreign coal expert has drafted a
\nnew royalty scheme to benefit companies processing low quality
\ncoal.<\/p>\n
Rozik said he would present the plan to Minister of Mines and
\nEnergy Kuntoro Mangkusubroto and Minister of Finance Bambang
\nSubianto for approval in the near future.<\/p>\n
\"Under the new scheme, the royalty amount payable by mining
\ncompanies to the government will vary depending on the quality of
\nthe coal and remoteness of the area.<\/p>\n
\"The royalty scheme will also be dynamic as the amount of
\nroyalties will be changing in tune with changes in coal prices,\"
\nRozik said.<\/p>\n
The new royalty scheme may reduce the government's royalty
\nearnings in the beginning, but royalties are expected to rise as
\nmining firms increase their production of low quality coal. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-plans-incentives-for-coal-mining-activities-1447893297",
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"sponsor": "Okusi Associates",
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