Indonesian Coal Production Could Fall 40 Percent in 2014

Reuters reported that if the Indonesian government goes through with its plan to increase royalties paid by mining permit holders, the country’s coal production could drop by up to 40 percent next year.

As quoted in the market news:

Indonesia, the world’s top exporter of thermal coal, plans to increase from next year royalties paid by mining permit holders (IUP) to between 10 and 13 percent from 3.5 to 7 percent now.

‘I would say 30-40 percent (cut). Most of Indonesia’s coal (production) is IUP-related,’ Pandu Sjahrir, commercial committee chairman of the Indonesian Coal Mining Association, told reporters.

If the royalties are unchanged, Indonesian coal output in 2014 is likely to be near the same level as this year’s more than 400 million tonnes, he said.

Click here to read the full Reuters report.