Investors question local administrations' readiness in handling mining contracts

Foreign mining investors have been questioning the readiness and capability of officials at local administrations in processing long-term mining contracts and handling various other mining activities that have become their authorities.

They also question the continuation of mining contracts of works they have signed together with the central government, with confirmation from the House of Representatives, according to the director general of general mining at the Ministry of Energy and Mineral Resources, Surna Djajadiningrat.

To anticipate and help handle various problems faced by local administrations, Surna said, the central government through his ministry had established task forces and communication forums at the district level to help oversee mining activities.

Surna said that his ministry was coordinating with the Ministry of Home Affairs and Regional Autonomy in studying various issues concerning the transfer of mining authorities from the central government to local administrations.

He noted that under the regional autonomy law and supporting regulations, the central government, with confirmation from the House of Representatives, would still hold the authority to sign a mining contract of works with mining companies.

Nevertheless, the role of local administrations would be very dominant under the new mining contracts of works. Mining companies would deal more with local administrations than with the central government in dealing with their day-to-day business.

Surna also reiterated that the contracts of works signed before the implementation of the autonomy law, or before Jan. 2001, would still be valid until their expiration date, and therefore, the exiting mining companies operating under the old contracts of works should not be worried about their mining contracts. And the companies would still be required to honor anything stipulated in the contracts. (*)