Government hopes IMFA to drop coal lawsuit
Monday, July 25 2016 - 01:53 AM WIB
Director General of Mineral and Coal Bambang Gatot Ariyono was quoted by Investor Daily as saying Monday that IMFA?s coal concession has overlapped with five mining firms holding the IUP mining business permits in Central and South Kalimantan. He said that four mining firms have agreed to reduce their concessions, while another one wants its concession which overlaps with IMFA?s to be replaced. He did not disclose the name of the five coal firms.
?What is clear is that when the case is proceeded at the court, we?ll say that the main issue of the case has been settled. As such, we hope that the court proceeding will be discontinued,? Bambant said over the weekend.
IMFA filed in September of last year a lawsuit against the Indonesian government with an arbitration court in The Hague after the company failed to carry out mining operations at its concession in Kalimantan due to overlapping permits. The Indian firm also demanded compensation worth US$581 million (about Rp 7.7 trillion).
IMFA acquired the concession from an Indonesian firm PT Sri Rahayu Indah (SRI) in 2010 for $8.7 million, according to the government. SRI obtained an IUP mining business permit for a combined concession of 3,600 hectares, spanning the regencies of East Barito, South Barito (South Kalimantan) and Tabalong (Central Kalimantan).
Problem emerged for IMFA after the local regency administrations issued permits to other seven investors.
The problem of overlapping permit emerged after the central government handed over the authority in issuing mining permits to local administrations as part of their greater autonomy power. This has been seen as one of the key challenges of investing in the Indonesian mining sectors.
The government has said that IMFA has failed to conduct proper due diligence process in acquiring SRI. The Indian firm should have consulted the central government before making the investment. (*)