Jero claims several miners have agreed on six points of contract renegotiation
Thursday, January 30 2014 - 02:27 AM WIB
Minister of Energy and Mineral Resources Jero Wacik told lawmakers on Wednesday that his office has finally managed to reach agreement over the tough contract renegotiation with several mining companies.
Speaking at a meeting with the House of Representatives Commission VII overseeing the energy and electricity sector, Jero, while unveiling the ministry?s 2013 performance, said that seven holders of the so-called contracts of work (CoW), and 15 holders of coal contracts of work (CCoW) have agreed to all of the six points of renegotiation proposed by the government.
He did not disclose the name of the seven mining companies and 15 coal mining firms.
But report by Bisnis Indonesia daily Thursday revealed that the mineral and coal mining companies which have finalized the contract renegotiation were mostly smaller mining firms with mining areas of less than 25,000 hectares.
Reduction in the size of mining concession of the miners is one of the most difficult issue of the six-point of contract renegotiation which also includes obligation to build domestic smelters, transformation of mining contracts into IUP mining business permit, increase in royalty, divestment obligation, and the use of domestic goods and services.
The government has been struggling to force miners particularly giants such as PT Freeport Indonesia, PT Newmont Nusa Tenggara, and PT Vale Indonesia to agree on the six-points of contract renegotiation as the country aims to generate greater benefits from its mining resources.
Elsewhere, Jero said that of the 34 CoWs being renegotiated during last year, one CoW was terminated (PT Koba Tin, as the government decided not to extend the contract of the tin mining firm); and two CoWs requested for termination (PT Nabire Bakti Mining, and PT Irja Eastern Mineral).
He added that many miners have partly agreed on the six points of renegotiation, comprising of 29 holders of CoWs (also known as KK) and 57 holders of CcoWs (also known as PKP2B).
Editing by Reiner Simanjuntak