MEMR fails to meet deadline to complete mining contract amendment
Friday, October 30 2015 - 02:01 AM WIB
As a result, none of the 33 mining firms holding so-called mining contract of work (KK) and 63 coal miners holding the coal contract of work (PKP2B) have completed the amendment of their contracts by the October deadline. So far only one KK holder and 10 PKP2B holders have emended their contracts.
Director for Mineral Management and Development at MEMR, Mohammad Hidayat said on Thursday that 14 KK mining firms are now expected to sign the amendment of their contracts in November. The 14 miners are seen as smaller miners, as renegotiation process with giants such PT Freeport Indonesia and PT Newmont Nusa Tenggara remains tough.
Meanwhile, Director for Coal Management and Development Adhi Wibowo said Thursday that his office was focusing on 12 coal miners to complete the amendment of their contracts, all of which are third generation PKP2B coal miners.
The government has repeatedly failed to meet mining contract amendment deadlines.
The government has been renegotiating for the past of couple of years with miners to amend their mining contracts to comply with the stipulations in the 2009 Mining Law. The main point of changes in the contract as proposed by the government include the reduction of mining concession, conversion of contract from KK to IUP mining business license, the use of local content, downstream obligation, higher royalty, and obligation for foreign miners to divest up to 51 percent shares to local investors. The current coal market downturn has made the renegotiation process more difficult, officials have said.
Adhi said that the most difficult issues in renegotiation process first generation PKP2B coal miners, which are mostly giant miners, are reduction of mining concession, higher royalty, and divestment obligation.(*)