Mining investors required to partner with state owned enterprises

Mining investors in Indonesia?s general mining sector are now required to establish a partnership with state owned enterprises as government will no longer be directly involved in the signing of new contract, Bisnis Indonesia reported Monday

Director general of minerals, coal and geothermal Simon F. Sembiring said that the requirement is one of the points included on the new mining bill.

?There will not be any contracts with companies like Freeport. We want to avoid contracts with government. The authority will be given to state enterprises. So the negations will be business to business between the state enterprise and investors,? Simon said.

Simon said the main objective of this new system is to avoid direct agreements between the government and investors. So far, the previous contracts of works (CoW) have become problematic.

Simon has also said that the new law will cut the bureaucratic procedures for obtaining various permits to just two permits of exploration and exploitation.

Meanwhile, deputy chairman of Indonesian Chambers of Commerce and Industry (energy and resources) Dito Ganinduto said the new system would cut the red tape and boost investments in the mining sector. (*)