Bisnis Indonesia reported today that at least fifteen tin smelters holding mining concessions are suspected of not paying a 3% royalty from 2002 to 2005, inflicting a total loss of US$19.63 million (182.5 billion rupiah) on the state. An unnamed official at the Department of Energy and Mineral Resources said that “due to data limitation, there are no royalty payments made to the state account. The state only has a complete record of their royalty payment starting from the middle of 2006 until now.”
The source added that the government may seek to retrospectively negotiate back payments for this period, although he admitted that it was possible that the royalties had been collected by the regional government. The official declined to name the companies concerned, which did not include the two main integrated producers PT Timah and PT Koba Tin. Director General of Mineral, Coal, and Geothermal at the Department of Energy and Mineral Resources Bambang Setiawan declined to comment on the issue.
Last year, as part of the new Ministry of Trade export licencing system, the state collected US$38 million in tin royalties, with approximately $24 million collected from the two main companies and $14 million from private smelters. There are currently 17 private smelters with export licences, although some were not in operation before 2006.
