Govt will withdraw non-productive mining contract of work

The government will not soften against mining companies which have failed to develop their mining sites by the deadline as specified in their mining contract of work or locally called KP, according to director general of mining Surna T. Djajadiningrat.

Surna said that the sanction for the failure would be a withdrawal of the KPs.

"We can no longer tolerate those who abandoned their sites without any activity. We will immediately withdraw the KP and hands over the ex-KP to the local government to be offered again to other investors," Surna told the Neraca daily.

Surna made the statement amid protest from several mining firms whose KPs had been withdrawn. The companies argued that they could not yet start development because of the current economic crisis.

But Surna said that the government could not tolerate because many other investors were interested in their KPs, and because of the fact that the companies had quietly resold the KPs to other investors.

Neraca said that out of some 300 KPs which have been issued by the government, around 70-80 KPs are considered as non-productive KPs which mean that the holder of the contracts had not yet started development activity. (*)