Release: Jatenergy: Indonesian mining legislation amendments

(March 13, 2012)--Energy company Jatenergy Ltd announced today that it was reviewing the published amendments to Indonesian Mining Legislation that were enacted in February 2012 to assess whether there was any impact on the company.

The main amendment increases divestment obligations for foreign shareholders in certain Indonesian mining projects. Local ownership requirements, which are currently set at 20 per cent, would be increased gradually after the fifth year of commercial production to reach 51 per cent after the tenth year of operation.

Few details have emerged about the amendments, however, including the timeframe of implementation. Jatenergy is closely monitoring information as it becomes available to determine what action, if any, would be appropriate.

Jatenergy?s smaller East Kalimantan coal operations, the Jongkang I and II mines and the Atan Bara development, are unlikely to be impacted given that the mining licenses are held by local companies. Purchase arrangements for the potentially larger Katingan project in Central Kalimantan are currently underway, involving the acquisition of 80 per cent of local company PT Coal Soil Brik, which holds the license for the project and is in the process of being converted into a foreign investment vehicle.

Jatenergy?s CEO Phil Hodgson commented: ?We have operated in Indonesia for several years and have considerable experience with government and local business practices. We also have the rights to coal and renewable crude oil assets in Indonesia and Australia, held under various ownership and partnership structures. This provides diversification of our revenue streams and development potential so that we can effectively manage regulatory risks.?(ends)