Indonesia Short $5 Billion Due to Illegal Coal Mining

Reuters reported that although Indonesia is the world’s top exporter of thermal coal, every year over $5 billion worth of the fuel is mined illegally and as a result goes untaxed.

As quoted in the market news:

The gap between recorded and actual output has also attracted the attention of Indonesia’s top anti-graft agency the Corruption Eradication Commission (KPK).

A combination of export data from the Bureau of Statistics, using customs information, and consumption data from state electricity utility Perusahaan Listrik Negara PLNEG.UL, shows Indonesia’s total coal output at 451.9 million tons in 2012.

That is 56 million tons higher than production estimates from the energy ministry, which gathers its information from licensed companies and regional authorities.

“The question we’ve always asked is: ‘where’s the missing 50-to-60-something million?” said Pandu Sjahrir, commercial committee chairman for the Indonesian Coal Mining Association, which represents 125 coal firms including PT Adaro Energy (ADRO.JK) and PT Berau Coal (BRAU.JK).

Click here to read the full Reuters report.