IMA: Mining contract period needs to be extended to 30 years
Thursday, July 5 2001 - 02:00 AM WIB
IMA chairman B.N. Wahyu said the current mining policy was very short-term in nature, and therefore, in the next five years, it would be difficult to be implemented.
"Mining exploration is a long term investment, therefore, it needs a regulation or policy and also law that covers a long period of time," he said.
He said in developing countries like Indonesia, mining contract should be valid for at least 30-year period so that it would be attractive for mining investors to come and invest.
Therefore, he said, the Indonesian government should follow suit and adopt a policy that allows mining contracts to cover a period of at least 30 years. If the government adopts this, the contract of work system may be abandoned.
"However, if the regulations tend to change whenever there is a change of minister, it is impossible to abolish the contract of work system," he said.
He noted that investors would still prefer using COW as it offers a possibility for negotiation in which investors may demand incentives and limit its obligation.
COW is still needed by investors now because of various regulations that tend to change and tend to burden investors, including regulations on environmental protection.
Citing an example, Wahyu said the testing of mining waste such as tailing has to be done by the government at its facility in Cibinong, West Java, although mining companies such as Freeport Indonesia has its own facility. This policy burdens mining companies. (*)