Mining contract renegotiations in the pipeline

The government has established a special team of top government executives tasked to evaluate and renegotiate mining contract of works, especially those of coal undertaking, deemed as unfavorable to the state.

The legal basis for the team and its scope of work is Presidential Decree No. 3/2012 signed on January 10. The team will be effective until December 2013. ?We will evaluate everything, including contract of work for large miners,? said Deputy Minister of Energy and Mineral Resources Widjajono Pertowidagdo on Friday as reported by Kontan.

Coordinating Minister for the Economy Hatta Rajasa chairs the team, which also has Minister of Energy and Mineral Resources Jero Wacik as the Executive Chairman. Members include Finance Minister, Domestic Affairs Minister, Justice and Human Rights Minister, Industry Minister, Trade Minister, Forestry Minister, State Enterprises Minister, State Secretary, Attorney General, Chairman of State Comptroller Agency (BPKP) and Chairman of Investment Coordinating Board (BKPM).

?About 65% of mining companies have agreed to enter into this negotiation of contract of works,? said Coordinating Minister for the Economy Hatta Rajasa. He added that the team would also formulate ways to encourage the development of coal mining downstream business. (*)