Government set to offer via tender ex-mining areas this year

The Ministry of Energy and Mineral Resources is set to offer ex-mining areas of IDX-listed integrated nickel firm PT Vale Indonesia Tbk, and tin miner PT Koba Tin to investors via tender this year.

Director General of Mineral and Coal Bambang Gatot Ariyono said on Thursday that the government will also offer in future tender the Wabu block now still owned by gold and copper giant PT Freeport Indonesia once ongoing negotiations between the company and the government has been concluded, and the block is returned to the government.

Bambang said that there will be eight special mining business license areas, which have been returned by Vale to the government, to be offered via tender this year. ?All will be offered in tender, hopefully this year,? he said, adding that while so far there has been no investors which have expressed interest in the former mining areas, the government will prioritize allocating the mining areas to state-owned or regional government-owned companies.

As has been previously reported, PT Vale in 2014 returned more than 72,000 ha of its concessions scattered in four regencies in South Sulawesi, Central Sulawesi, and Southeast Sulawesi provinces as part of an obligation set in its revised mining contract, thus reducing the firm?s concessions from about 190,500 ha to around 118,000 ha.

Bambang said that the government also plans to offer to investors via tender this year the former tin mining concessions of PT Koba Tin in Bangka Belitung Province. He added that the new investor will be obliged to complete the unfinished reclamation process at part of the tin concession.

Koba Tin returned the total 41,344.26-ha concessions to the government after its mining contract expired in September 2013.

Regarding PT Freeport?s Wabu block in Papua Province, Bambang said that the concession is still held by the company. He explained that once PT Freeport finally agrees to convert its mining permit status into special mining business license (IUPK), the company will be required to return part of its concessions to the government, which will then offer it to other investors via tender mechanism. The company plans to return the Wabu block. (*)