Insight
Royalty increase would be another blow for Indonesian coal mines
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Report summary
The Indonesian government is considering hiking royalties for IUP mines from 3-7% of revenue to 13.5%. We expect such an increase will raise cash costs by 9% and wipe out 20% of value from IUP mines. PTBA would be the worst affected of Indonesia's major producers with the value of the company's coal mines expected to decrease by more than US$1 billion. Ironically, PTBA is 65% owned by the Indonesian government. The rationale for increasing royalties is to boost government revenue from the...
Table of contents
- Executive summary
- Government considering IUP royalty increase to 13.5%
- Impact on Indonesian mines
- Impact on companies
- Impact on government revenue
- Rationale and consequences
- Economic assumptions
Tables and charts
This report includes 4 images and tables including:
- Possible royalty change
- Impacts of possible royalty change
- Change in coal portfolio valuations for IDX listed companies if IUP royalties increase to 13.5%
- Total government take from Indonesia's coal industry
What's included
This report contains:
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