Indonesia plans export tax on coal - Report

Sunday, 25 Dec 2011

Reuters reported that an Indonesian industry minister said on that Indonesia will look to introduce export taxes for coal in 2012, as it tries to encourage more investment in its mining sector.

Mr Mohamad Hidayat told Reuters "We are preparing the concept of export tax on mineral products as a supporting policy for encouraging base metal and coal downstream industry development. The idea would soon be discussed at the finance ministry's fiscal policy agency.”

He said “Hopefully we can impose the export tax in 2012.”

Mr Sagala added "This is crucial as a milestone for a total export ban in 2014. If we wait until the total ban is imposed in 2014 then it will be late for the government in preparing the local downstream industry.”

The Indonesian energy and minerals ministry is already drafting a rule that would by 2014 require miners to carry out minimum processing on minerals before export.

Any regulation would be part of a mining and coal law introduced in 2009 that requires miners to process coal and minerals into higher value products before exporting them, as Indonesia seeks to boost revenue from the mining sector.

Indonesia has been considering an export tax on power plant fuel coal for many months, but implementation is likely to face fierce opposition from the industry. The country produces mainly low grade coal, used predominantly in India and China.

(Sourced from Reuters)