Govt sets conditions for mining contract renegotiation

The government is ready to renegotiate all existing mining contracts to share the windfall profit gained by mining firms from the soaring prices of most mining products, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

"We are ready to renegotiate the mining work contracts again and adjust them to the dynamics developing in the society," the minister told a parliamentary hearing with the House of Representatives' Commission VII which deals with energy and mining affairs on Thursday.

He said the government would observe four aspects if it decided to renegotiate the contracts.

The first aspect is timeframe, he said, adding it would take five years for the government to renegotiate the contracts.

The substance of the contracts should be decided based on their individual contents, he added.

Besides, Purnomo said, the changes in the contracts should be in line with existing laws.

In case a change is to be made in an existing contract, the parties involved must have another agreement to change it.

The change in the contract should not abolish the rights of parties involved in it, he said.

"So, the four conditions must be observed before (we decide) to change the contracts," Purnomo said.

During the hearing, the Commission members questioned whether or not the change of the contracts can be covered by a transitional article of the Law on Minerals and Coal which is being debated at the House.(*)