Berau Coal rejects contract renegotiation

IDX-listed coal giant PT Berau Coal Energy Tbk has refused to accept the contract renegotiation proposed by the government particularly regarding the request to drastically cut down the company?s concession area to maximum 15,000 hectares, Bisnis Indonesia reported on Thursday.

The paper quoted Berau Coal President Director Amir Sambodo as saying that its existing contract does not acknowledge such cut in the concession area.

He added that drastic reduction in the size of concession would cause the company to suffer huge losses and disrupt investment plans.

?The size of our concession is about 118,000 ha. We have set plans for these assets. So, it can?t be reduced,? Amir said.

The government is currently engaged in renegotiation with miners to revise their contracts to accommodate with the terms stipulated in the 2009 Mining Law, which among others stipulate that the maximum size of concession allowed for an IUP coal miner is 15,000 ha.

Elsewhere, Berau Coal Director Arief Widhartono also protested the company?s coal production quota of 22 million tons this year set by the government as it does not meet the economic scale of production.

Arief said that the company?s production level this year should be 26 million tons, up from 23 million tons last year.

The government has said it wants to limit coal production in the country, the world?s largest exporter of thermal coal, in a bid to help support sagging price of the commodity and ensure supply for future domestic consumption by setting up quota for each miners. (*)