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Coal miners lament ‘burden’ of impending export revenue obligation
A new policy requiring commodity exporters to keep some of their foreign exchange revenue in Indonesia is cause for alarm among coal miners.
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A bulk freighter carrying coal cruises on the Musi River in Palembang, South Sumatra in 2019.
(Antara/Nova Wahyudi)
A
new policy requiring commodity exporters to keep some of their foreign exchange revenue in Indonesia is a cause for alarm among coal miners.
The Indonesian Coal Mining Association (APBI) says the new rules based on Government Regulation No. 36 of 2023 are going to be troublesome for exporters.
The new regulation, which will take effect on Aug. 1, requires firms to deposit at least 30 percent of their natural resource and foreign exchange export profits (DHE) in the Indonesian financial system for a minimum of three months.
The mining firms fear this will cause a cashflow headache for exporters, given that their margins do not reach 30 percent, and it may tie up working capital and push up operational costs.
"We can see that Government Regulation No. 36/2023, which stipulates the obligation to deposit natural resource DHE, will add to the burden placed on businesses in light of the downward price trend and increased operational expenses. Businesses will struggle to manage cash flow for immediate needs, including contractor and vendor payments," the APBI declared in a statement.
The APBI notes that the price of coal has sharply decreased since the second half of 2022, while operational costs have risen by an average of 20 to 25 percent as a result of higher fuel prices, a higher stripping ratio that raises mining costs, the impact of inflation and an increase in royalty rates.
The royalty for Mining Business License (IUP) holders increased from a tariff range of 3 to 7 percent to 5 to 13 percent in August 2022. Meanwhile, for some Special Mining Business License (IUPK) holders, it has increased to 28 percent, as stipulated in Government Regulation No. 15/2022.
