Minister wants to revise regulation on mining contract
Friday, September 9 2016 - 02:48 AM WIB
Interim Minister of Energy and Mineral Resources Luhut Panjaitan said on Thursday that the revision of the government regulation is necessary to help improve investment climate in the country?s mining sector.
According to the current regulation, mining companies can only apply for an extension of their contracts two years before their expiry. But this requirement poses a serious problem for companies such as PT Freeport, which plans to quickly spend billions of US dollar in developing underground mine in Papua and copper smelter in East Java, while its mining contract of work is set to expire in 2021. To allow the company to get certainty for its planned huge investment, PT Freeport wants to get renewal of its mining contract before 2019.
Luhut, however, dismissed speculation that the move to revise the government regulation was to accommodate the interest of PT Freeport, a local subsidiary of US giant Freeport McMoRan Copper & Gold Inc.
Director General of Mineral and Coal Bambang Gatot Ariyono said that the ministry has yet to set a timeframe as to when it would propose for the revision of Government Regulation No 77/2014. Previous minister Sudirman Said had made similar proposal but failed to gain approval from President Joko Widodo, reports said.
Bambang said that ideally, mining companies can make a request for contract extension as early as 10 years prior to their expiry, a similar treatment given to oil and gas contractors. (*)