- Indonesia preparing coal export levy tied to global prices
- Weak demand weighs on Indonesia’s coal export revenue
Mysteel Global: Indonesia may introduce a coal export levy next year, Finance Minister Purbaya Yudhi Sadewa told reporters on Wednesday, without offering further details.
Tri Winarno, Director General of Minerals and Coal at the Ministry of Energy and Mineral Resources (ESDM), did not deny the minister’s remarks. He noted that any duty would only apply when coal prices are elevated, according to a report by local outlet Bisnis.
Earlier this week, ESDM Minister Bahlil Lahadalia said the ministry had completed the formula for export duties on coal and other minerals, including gold, and indicated that coal levies would be adjusted in line with global prices.
The ESDM has yet to disclose the formula, but Tri noted there will be a price cap for the duty levy to balance miners’ profitability with state revenue addition. Discussions with the finance ministry on the price threshold are underway, he was quoted as saying.
Indonesia, the world’s largest thermal coal exporter, exported 375.61 million tonnes (mnt) of coal in the first nine months of this year, Statistics Indonesia data showed. China and India continued to dominate purchases, though their slower buying has weighed on export volumes and prices, dragging down Jakarta’s state revenue.
In an effort to shore up prices, earlier this year, the ESDM had required coal transactions to reference the domestic benchmark index HBA, starting 1 March. The rule was later withdrawn, as most buyers showed little willingness to adopt it.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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