Over the past 20 years, the growth of the coal industry has been rapid and it has become one of the main sectors for State revenue. But, in 2019, production and investment in coal sector are predicted hard to grow amid the global uncertainty and unclear policies.
One reason is that there is no clear legal basis regarding the transfer of status of the Coal Mining Concession Contract (CMCC) to a Special Mining Business License, said Chairperson of the Indonesian Coal Mining Association Pandu Sjahrir. He revealed that the unclear regulation on the extension of licenses and status shifts could create uncertainty and make production stagnant next year.
Moreover, in the period 2019 to 2026, there are eight CMCC Generation I contracts that will expire, with many of them including giant companies like PT Kaltim Prima Coal, whose validity period will expire on Dec. 31, 2021. Then, PT Adaro Indonesia which will expire on Oct. 1, 2022, PT Kideco Jaya Agung whose contract is only until March 13, 2023, PT Berau Coal Tbk (IDX: BRAU) whose contract period will expire on April 26, 2025.
There is also PT Arutmin Indonesia whose contract will expire on Nov. 1, 2020, PT Multi Harapan Utama whose contract expired on April 1, 2022, PT Kendilo Coal Indonesia, whose contract is only valid until Sept. 13, 2021, and PT Tanito Harum whose contract will expire on Jan. 14, 2019.