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Indonesia aims to start collecting levies from coal miners in January

21st November 2023

By: Reuters

  

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JAKARTA - Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower prices, the mining minister said on Tuesday.

The plan to set up the scheme follows a coal supply crunch at local power plants that forced the world's largest thermal coal exporter to temporarily halt exports at the beginning of 2022.

Indonesia requires miners to sell a portion of their output to state power firm Perusahaan Listrik Negara (PLN) at a maximum price of $70 per metric ton and to certain local industries at a maximum $90 per ton.

Officials said when global prices of coal are high, some miners would not comply with the rules, causing a supply crunch.

Under the planned scheme, all coal miners will be required to pay levies and the proceeds will be used to compensate miners who supply to PLN at the capped price.

"This will create fairness and a level playing field. Everyone will share the responsibility to support the government programme relating to domestic market obligations," Energy and Mineral Resources Minister Arifin Tasrif said at a parliamentary hearing.

He gave no estimate of how much would be collected.

The regulations and infrastructure needed for the implementation of the scheme are being finalised, he said.

"If all these can be finished soon, we can run a trial in December and the operation can start in January 1, 2024," Arifin said.

State-controlled Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia will be appointed to collect the funds, he added.

Coking coal miners will be excluded from the scheme, Arifin said, but they would still be required to meet the domestic sales obligation.

Edited by Reuters

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