Govt may ask foreign smelting firms to divest 51% of their shares

The government requires foreign companies which operate smelting plants to divest up to 51 percent of their shares to local companies after a certain period of their commercial operation.

Director general of mineral and coal at the Energy and Mineral Resources Ministry Thamrin Sihite said that the government had agreed to impose a policy to require foreign smelters to divest up to 51 percent of their shares to local companies.

?The divestment policy was approved during the meeting and Coordinating Economic Minister [Hatta Rajasa] had made his decision,? he told reporters following a coordinating meeting at the office of the coordinating economic minister.

However, Trade Minister and head of the Investment Coordinating Board (BKPM) Gita Wirjawan opposed the plan, saying that the policy would further create a negative sentiment to investors.

He said that such a policy would be difficult to accept especially during the current condition when the global economy was still clouded with uncertainties.

Gita agreed that if the divestment policy was imposed on the upstream industry, but not to the downstream sector.(*)