14 mining contracts to be signed in first quarter

The government will sign 14 new mining contracts in the first quarter of this year as part of the renewal of the contracts following contract renegotiations with the country?s mining companies, Investor Daily reported on Monday.

Thamrin Sihite, the director general of mineral and coal at the Energy and Mineral Resources Ministry, said in Jakarta last week that 14 new contracts were the result of the first phase of the renegotiations with mining companies.

The 14 companies which would sign the new contract have all agreed with the six points being negotiated with the government. The companies include two contract of works (KK) holders, PT Tambang Mas Sable and PT Tambang Mas Sanghie, which are both still on exploration stage.

The other 12 miners are the holders of PKP2B permits including PT Asmin Bara Jaan (on construction stage), PT Selo Argokencono Sakti (on feasibility study) PT Bangun Banua Persada Kalimantan, PT Batu Alam Selaras, PT Kadya Caraka Mulya, PD Baramata, dan PT Sumber Kurnia Buana, which are on production stage.

Renegotiation with mining companies have taken place since early last year as part of the government?s plan to bring all existing mining policies in line with the new mining law.

The renegotiation covers six main issues, including the increase in royalty payments, the obligation to process mineral ores in Indonesia, the use of local goods and services, divestment, contract extensions and the size of mining areas.

More than 75 mining companies, both the holders of KK contracts and PKP2B permits, have not yet completed the negotiation process. They include large miners such as Vale Indonesia, Freeport Indonesia, Newmont and Weda Bay Nickel. (*)