Interview - Government called on to resume mining contract negotiations
Tuesday, September 12 2000 - 05:30 AM WIB
A mining executive called on Tuesday on the ministry of energy and mineral resources to resume negotiations on the applications for contract of works COW, which had been reportedly suspended in anticipation of the implementation of the autonomy law.
Under the autonomy law, which the government has planned to implement starting early next year, the regional authorities will take over from the central government the rights to manage their own natural resources and license their development.
Gerry Mbatemooy, who is vice president of Britain based mining company Billiton Indonesia, said many foreign investors who had applied to the ministry for COWs were strongly wishing to start negotiations with the ministry on their application. But the ministry refuses to do so as it is prepared to transfer all its mining rights, including the rights to license mining operations, to the regions.
"I have received many phone calls from many foreign investors from many parts of the world asking when the ministry will start to negotiate their applications for COWs," Gerry told Petromindo.com in his personal capacity.
Gerry said investors believed that for the moment the regions were not yet capable to execute their mining rights, including negotiating their application for COWs, due to the lack of skilled human resources and poor understanding of mining rules.
They were also worried about the possibility that the regions would introduce rulings, which did not support mining investment.
" Some regencies don't even have any single computer. How can they process the applications quickly?" Gerry said, adding negotiations with the regions could be time consuming.
As such, Gerry said, if the ministry suspended the negotiations of the application for COWs until the implementation of the autonomy law, Indonesia would lose the opportunities to gain new mining investment in the near future.
He noted that many mining investors were now eager to start explorations in Indonesia following the rise in the prices of mining products including copper and gold. They also thought investment climate in Indonesia had been improving.
"The investors are ready to spend millions of dollars for explorations, which will be very helpful for the country's efforts to recover from the economic crises. If we delay giving them licenses, we'll lose the opportunities to get their investment fund," Gerry said. (bodega)