(The Insider Stories) - Energy and Mineral Resources Deputy Minister Susilo Siswoutomo said that Indonesia will increased royalty rate on coal mining permits (IUP) to around 10 to 13% at the beginning of January 2014 from 3 to 7.5%.

He said it was not possible for the government both to submit the recommendation on coal royalty increases and apply coal export duties this year due to declining coal prices.

The proposal was first made last year. Indonesia wants to raise revenue from mining after a slide in commodity prices led to a near-record trade deficit in April.

The country’s biggest producers such as PT Bumi Resources (BUMI.JK) and PT Adaro Energy (ADRO.JK), which hold longer-term licenses signed with the central government, already pay a 13.5 percent royalty and higher taxes than IUP holders.

Meanwhile, Finance Minister Chatib Basri said the government was ready to set the target if the Energy and Mineral Resources Ministry had issued the recommendation.

Indonesia, the world’s biggest exporter of thermal coal, proposed doubling royalties for some miners next year, threatening margins at companies that produce about 20 percent of the nation’s supplies.

Asia’s benchmark coal prices have fallen by more than half since a peak in mid-2008 amid slowing Chinese imports and rising output.

Thermal coal at the Australian port of Newcastle was at $86.40 a metric ton as of June 7, according to data from IHS McCloskey.

Prices are 4.7 percent lower this year after losing 19 percent in 2012. They were as high as $192.50 in July 2008. Indonesia coal swaps for July were at $62.65 a ton yesterday, according to Ginga Petroleum Singapore Pte. Indonesia proposes export ban trade off.