Govt and Vale differ on contract extension guarantee

By Tri Subhki R

Government and nickel mining company PT Vale Indonesia Tbk (INCO) are discussing the contract renegotiation of Contract of Work (CoW). One of six points of renegotiation that hampers the deal is the contract extension guarantee.

"They want contract extension guarantee, but we cannot provide any guarantee. The company should propose contract extension two years before the contract expires," Director General of Mineral and Coal R Sukhyar said to Petromindo.com

Vale's CoW will expire in 2025 and the company is proposing contract extension for another 20 years as part of renegotiation deal.

There are six points in contract renegotiation, including are mining area relinquishment, divestment, utilization of local contents, royalty, smelter construction and the change of CoW to IUP.

Editing by Alexander Ginting