Starting a Coal Business: From Prospects to Tips on Obtaining a Mining Business License


The coal business allegedly provides abundant profits. In fact, many of Indonesia's richest people are predicted to come from the coal mining sector. So, it's not surprising that this businessman often gets the nickname 'Sultan of Coal'. Call it Theodore Rachmat. This senior in the black gold business is ranked 15th for the richest person in Indonesia according to Forbes with a fortune of $3.1 billion (around Rp.44.41 trillion). Actually, what makes the coal business so popular and how do you start a coal business? Check out this article to find the answer!

Coal: The King of Mining Business
Because of the importance of coal in various sectors of life, this mining product has been given the nickname 'black gold'. Curious about the prospects for the coal business? Here are the various uses of coal in 3 sectors of life.

3 Sectors of Coal Business Prospects
The best-selling coal business cannot be separated from its benefits. This black gold can be processed and used in various sectors, including for household needs, transportation fuel to support industrial processes.

Utilization of Coal for Household Needs
For household needs, the benefits of coal are certainly felt in the form of electricity and heat energy. This black gold is one of the greatest sources of powerhouses. This is evident from the data compiled by the Ministry of Energy and Mineral Resources which shows that domestic coal consumption in 2020 reached 121.89 million tons with the largest supply coming from the PLTU (Steam Power Plant) sector which is spread across the islands of Java, Bali, Nusa Tenggara. , Sumatra, Maluku, Sulawesi to Papua.

Apart from being a power plant resource, coal can also be utilized as a substitute for kerosene. Coal that has been processed into briquettes can be used to produce heat energy. Briquettes can be used for cooking and to produce heat energy in home fireplaces.



Utilization of Coal in the Industrial Sector
The first use of coal in the industrial sector is the cement industry. Here, coal is usually used as fuel for the combustion process in making cement.

In addition, the benefits of coal can also be felt in the health industry. This black gold can be processed into coal tar (coal tar). Coal tar itself is a dark liquid that can be used to treat itching, scaly skin and peeling due to skin conditions such as psoriasis, seborrheic dermatitis and atopic dermatitis. This skin medication is distributed in various forms, including bar soap, gels, creams to lotions and ointments. As a medicine, coal tar is marketed freely because it has obtained permission from the FDA (FDA Approve).

Utilization of Coal as Transportation Fuel
As a transportation fuel, coal is utilized in the form of gas or liquid fuel. Fuel is one of the essential elements in this modern era. Natural gas can be obtained from coal which is still stored in the ground. The gas that comes out of the coal is then directly processed at the mining site to become fuel gas (BBG). CNG produced from processed black gold can be used as a gas-fired power plant or can also be produced as diesel or hydrogen fuel.

Not only gas, coal can also be processed into liquid fuel or oil. To process these mining products into liquid fuel, the coal is first processed into powder or lumps, then dissolved at high temperatures to become oil. Oil made from coal is composed into Coal Water Mixture. CWM has a homogeneous and stable viscous suspension so that it can be used as an alternative/substitute for fuel.

Safe and Official, Here's How to Start a Coal Mining Business!

The trick to building a successful business lies in licensing. Likewise with the coal mining business. Moreover, this black gold business is directly supervised by the government. Therefore, if you want to become a successful coal entrepreneur, then your business permits are properly equipped.

The mining industry is regulated in the Mining Law, which is none other than the Mineral and Coal Law No. 4 of 2009. In addition, there is a Regulation of the Minister of Energy and Mineral Resources of the Republic of Indonesia No. 7 of 2020 which further regulates the procedures for granting areas, permits, and reporting on mineral and coal mining business activities.

Steps to Obtain a Coal Business License
Reporting from Daya.id, the following are the steps to obtain a coal mining business permit, Regulation of the Minister of Energy and Mineral Resources No. 7 of 2020.

Make sure that the business you want to run is not related to oil or gas mining activities. This is because the sector is limited in terms of operations as well as foreign ownership.

Next, you must determine the business activities that are carried out, whether the business is core or non-core. Core activities mean activities that are prospects, exploration, public investigations, processing and refining, after-mining services, reclamation, transportation, mine construction, mine environment, and occupational health and safety. While non-core activities are other activities that are not included in core activities.

Most importantly, your company must be a PT PMA company or a foreign investment company. In this case, you also have to coordinate with the Investment Coordinating Board (BKPM).

The next step is to collect all the files needed and submit them to the Directorate General of Minerals and Coal. For the record, this stage is very important. Therefore, as much as possible you don't make mistakes that prevent you from getting a license.

Please note, there are two types of licenses to choose from, namely: Mining Service Business Permit (IUJP) and Certificate of Registration (SKT). But the general term for the license is IUP which you can get from the Ministry of Energy and Mineral Resources.

1. Then, make sure you follow the tender process. That will determine whether you have rights to a particular mine site. Only the government can perform this procedure. When you have obtained the rights, you can get an IUP (Mining Business Permit) and the coal mining business you own can only be run.
   
   The last thing to remember in building a coal mining business is paying VAT. Do not ignore that the activity of buying and selling coal has not escaped the imposition of 10 percent VAT since the enactment of the Ciptaker Law. In addition, this VAT rate will increase to 11 percent as of April 2022 according to the provisions in the HPP Law. In addition, you must also pay tax (PPh) on the income you earn from the coal business at the applicable progressive rate. In either case, you can entrust your company's coal business tax affairs to the tax professionals at Konsultanku.