Concerns Arise as Stocks of Heavy Equipment Tires Dwindle in Coal Mining Sector
Business actors in the coal mining sector are growing increasingly worried about the diminishing stocks of heavy equipment tires and the potential impact it may have on operational and production activities.
Hendra Sinadia, the Executive Director of the Coal Mining Association Indonesia (APBI), stated, "If the supply of tires for heavy equipment is disrupted, it will hamper coal production activities as the equipment won't be able to function properly. This disruption will not only affect coal exports but also the supply of coal to PLN (state-owned electricity company)."
The scarcity of mining heavy equipment tires is attributed to the challenges faced in importing off the road (OTR) tires. Import activities for OTR tires have encountered obstacles, leading to a decline in tire stocks, with some even facing shortages.
Hendra hopes that the government can adopt flexible policies that consider the current circumstances. He stated, "Hopefully, the government can exercise discretion in terms of commodity balance, particularly in addressing the shortage of tires that could disrupt production activities. If these specific types of tires cannot be produced domestically, import permits should be simplified. The hope is to attract investors who are willing to produce high-quality tires for heavy equipment in the future."
He further explained that the remaining tire reserves currently last for only the next two months or even less.
APBI, as a member of Kadin, has conveyed this issue to the government, emphasizing the potential harm it could cause to business actors amidst efforts to support the economy and in the face of falling commodity prices. The impact will also affect heavy equipment business actors who are part of the mining industry ecosystem.
Hendra mentioned, "These potential obstacles have been previously communicated to the Ministry of Trade, the Ministry of Industry, and the Coordinating Ministry for Economic Affairs. The government has held several meetings, but finding a solution seems challenging as regulations related to imports and commodity balance have not been issued yet."
Nora Guitet, Chairman of the Association of Indonesian Tire Importers and Traders Association (Gimpabi), explained that the current situation is closely linked to two regulations: Government Regulation (PP) No. 28 of 2021 on the Implementation of the Industrial Sector, and PP No. 32 of 2022 regarding commodity balance.
PP 28 includes an article that hinders importers from carrying out import activities, which subsequently affects tire importation, including those used in the mining industry. As none of the heavy equipment tires for mining are domestically produced, they need to be imported.
"Moreover, many tire importers for mining are categorized as general importers (API-U) rather than manufacturer importers (API-P), which has prevented them from importing tires until now. We urge the government to revise this regulation promptly. Although it is in progress, there is no clarity on when it will be completed," said Nora.
Regarding PP 32 on commodity balance, Nora stated that a few weeks ago it was clear that tires were not included in the group of commodities that require inclusion in the balance. Therefore, what is urgently awaited and requested is the expedited revision of PP 28 to reopen import activities.
Nora explained the impact of these policies, stating, "For about six months now, we have been unable to import tires that are not produced domestically. As a result, coal, nickel, gold, and other mines are experiencing tire shortages."
Nora and Gimpabi members hope that the Ministry of Industry will promptly establish the necessary procedures for tire importers while the revision of PP 28 is underway.
"This way, when the revision of PP 28 is completed, the regulations regarding the requirements for tire importers from the Ministry of Industry will also be ready. This will speed up the time required by
Image source: ANTARA/HO-Aspindo
