Indonesia has amended contracts with 13 coal mining companies, including some of the country's biggest producers of the fossil fuel, as part of a shift toward a new mining permit system it expects to boost government revenues.
Under the amendments to the Coal Contracts of Work (CCOWs), coal mining companies agreed to pay 13.5% royalties on coal sales as a cash lump sum.
The companies can apply for an extension under a Special Mining Permit (IUPK) up to 2 years before their current contracts expire.
Among the companies that signed contract amendments at an event in Jakarta on November 14 were PT Bumi Resources Tbk units PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, as well as PT Berau Coal Energy Tbk and PT Kideco Jaya Agung.
The amendments for these generation 1 contracts of work also increase land rent to $4 per hectare from $1 per hectare previously, and will take effect immediately.
For later generations contracts used by companies including PT Barasentosa Lestari, PT Intitirta Primasakti, PT Juloi Coal, PT Kalteng Coal, PT Lahai Coal, PT Maruwai Coal, PT Pari Coal, PT Ratah Coal and PT Sumber Barito Coal, the changes come into effect in 2018.
A spokesman for Bumi Resources, Indonesia's biggest coal miner by output, confirmed the contract amendments by the two subsidiaries, noting that Arutmin's contract would expire in almost two years while KPC's contract is due to expire in 2021.
According to Energy and Mineral Resources Minister Ignasius Jonan the government expects an increase in state revenue of $68 million from the amendments.
There were still another 18 coal mining companies using contracts of work that had not yet signed amendments. "I hope this year they are all completed." Jonan said.
(Writing by Becky Du Editing by Tammy Yang)
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