Indonesia may not ban low-grade coal exports, impose export tax: official

Bali, Indonesia (Platts)--6Jun2012
Indonesia may not ban the export of coal with a low calorific value or may not even impose an export tax, but will definitely regulate coal production and exports and will look to increase government revenues from the commodity, a senior energy ministry official said Wednesday.

The official said Indonesia definitely had to impose rules to control the production and export of coal to ensure future generations in Indonesia will have enough resources.

Indonesia may run out of reserves in the next 40 years if the government does not take action to reverse the country's growing production, Indonesian minerals and coal director general Thamrin Sihite said in a speech at the Coaltrans Asia conference in Bali, Indonesia.

Another ministry official, who declined to be named, said on the sidelines of the conference that the energy ministry may propose to the trade ministry changing the status of coal to an export commodity that has to be supervised from its current status as one that can be freely exported.

In addition, as an alternative, the government may increase in stages the 3-5% royalty payment for low-grade coal to 13.5%, the ministry official said.

If coal becomes a commodity that has to be supervised by the trade ministry, exporters will need to secure an export license, he said.

The ministry official said the proposals are currently under discussion by officials and industry stakeholders, adding that ministerial regulations have yet to be drafted.

The official said the proposals are ideas that are gaining currency within the ministry and among some in the coal industry. The proposals are also a response to the negative reaction to the initial proposal of imposing a coal export tax and banning the export of so-called low-rank coal.

--Cecilia Quiambao,
--Edited by Jonathan Dart,