Government says mining contract renegotiation won?t be completed this year

Director General of Mineral and Coal Bambang Gatot Ariyono said on Friday that the government will have to extend again the deadline for the completion of the ongoing mining contract renegotiation process to next year as it would not be completed this year.

?It?s clear that the (mining contract) renegotiation will not be completed this year,? he said.

Bambang said early in March that the mining contract renegotiation must be completed this year, warning miners failing to do so would face consequences. He said at the time that renegotiation process for the contract amendment has been ongoing for seven years, and therefore the government would no longer tolerate further delay.

According to the 2009 Mining Law, the mining contract amendment should have been completed within in a year. Previous deadlines set by the government have been repeatedly missed, without sanctions.

Among of the tough issues in the mining contract renegotiation process is the requirement for miners to follow prevailing tax regulations under the new contract, instead of a nailed down system.

Of the 34 mineral mining companies undergoing renegotiation process with the government, only 10 have signed mining contract amendment, while of 73 coal miners holding the so-called mining contracts of work (PKP2B), only 22 have amended their contracts.

Meanwhile, Bisnis Indonesia quoted Bambang as saying that the main issues in the mining contract renegotiation may change depending on the results of upcoming deliberation of the proposed revision into the 2009 Mining Law. He did not elaborate. (*)