I

ndonesia expects to increase coal production by up to 20 million tons next year as lawmakers insist that the government must book higher non-tax revenue from the mining sector in 2010.

Bambang Setiawan, the director general for coal, minerals, and geothermal at the Energy and Mineral Resources Ministry, said the House of Representatives' budget committee had asked the government to set a non-tax revenue target of Rp 15 trillion (US$1.48 billion) from the mining sector in 2010.

"The government *had* earlier proposed the revenue at Rp 14 trillion, which is unchanged from this year's target.

"But, as the House's budget committee want the revenue to be Rp 15 trillion, we expect that next year we can slightly increase the production," Bambang said Thursday.

Coal and other mining commodities contribute to non-tax state revenue mainly through royalty payments. Coal contributes the biggest single contribution to state revenues from mining commodities.

The royalty payments will then be shared between the central and regional governments involved.

For this year, the country expects to produce 230 million tons of coal.

"If we want to secure the Rp 15 trillion revenue next year, we must increase coal production by between 10 million and 20 million tons. This is based on the assumption that the coal price is still unchanged from the current price of US$63 per ton," Bambang said.

"We hope that the production can be increased and the demand will be high next year so that the revenue target can be achieved," he said.

Bob Kamandanu, chairman of the Indonesian Coal Producers Association (APBI), said the target was "not too extreme" and achievable.

"This should be achievable, because last year the production was 239 million tons and this year it could be somewhere between 245 and 250 million tons. Thus the target of 260 million tons for next year will not be too difficult," he said.

The country's coal production has already reached 72 million tons in the first half of this year, according to data from the energy and mineral resources ministry.

In the same period, the coal sales volume reached 75 million tons; 52 million tons being sold to domestic buyers and the remaining 23 million tons going to exports..