PT Artha Daya appointed to manage state coal sales

JAKARTA (JP): The Directorate General of Mining has appointed PT Artha Daya Coalindo to handle sales of coal which the government receives from private coal mining contractors.

Minister of Mines and Energy I.B. Sudjana approved the company's appointment in a confidential letter dated Dec. 12. 1997 -- a copy of which was made available to The Jakarta Post by an anonymous source yesterday.

Artha Daya's appointment was proposed to the minister by director general of mining Adjat Sudradjat last November.

Sudjana said in the letter he would approve Artha Daya's appointment for several reasons, including that the firm was an affiliate of PT Pembangkitan Listrik Jawa-Bali 1 (PJB 1), which is a subsidiary of the state electricity company PLN.

Another reason was that the government wanted to use its coal share to "guarantee the supply of coal to the country's power plants," Sudjana said.

PJB 1 spokesperson Rulyati told the Post yesterday that Artha Daya was an affiliate of PJB 1 but the Ministry of Justice had yet to approve the establishment of the new company.

"Some shareholders of the company have not yet invested their equity," she said without identifying the shareholders.

According to the existing law, coal mining contractors are required to hand over 13.5 percent of their coal output to the government as concessionary fees and royalties.

The coal is sold on the domestic market.

Previously, the government assigned the state coal mining company PT Tambang Batubara Bukit Asam to conduct the trading of its coal share and transfer the proceeds to the government.

But Sudjana sparked a controversy two years ago when he ordered the company to transfer the revenue to his official account.

He argued that Bukit Asam had never transferred the money to the government but instead used it inefficiently.

Bukit Asam defied the minister's order, saying it would only transfer the funds to the minister of finance, the nominee shareholder in the country's state companies, instead of the minister of mines and energy.

President Soeharto issued a decree later that year revoking Bukit Asam's appointment and ordering all private coal mining contractors to give the government's coal share to the Ministry of Finance in coal or in cash.

Adjat issued a decree on Sept. 11, 1997 instructing all coal mining contractors to deliver the government's coal share to the government in cash.

But, the decree was only effective for about three months as Adjat's latest instruction has called on all private coal contractors to deliver the government's coal share to Artha Daya in line with the company's appointment as the sole trader in the government's coal share.

A copy of the letter of instruction was also made available to The Post.

In the letter, Adjat said that by issuing the letter of instruction he revoked his decree dated Sept. 11, 1997.

Coal mining contractors who wanted to remain anonymous said they would not suffer any losses from the new arrangement.

They were only concerned that the government would get less revenue from the sale of its coal share because Artha Daya would sell the coal on the domestic market, while mining contractors can export it and transfer the proceeds to the government.

They also said there was currently enough coal on the domestic market that the government did not need to supply all its coal share to the domestic market. (jsk)