Release: Strike Resources: Berau Thermal Coal Project - New Indonesian Mining Law
Thursday, February 19 2009 - 01:18 AM WIB
The mining rights underlying the Berau Project are held in what are known as Kuasa Pertambangan (KPs) under Indonesian Law. The KPs are owned by Strike?s Indonesian joint venture partner, PT Kaltim Jaya Bara.
The new mining Law which came into force in Indonesia on 12 January 2009 (New Mining Law) replaces the Mining Basic Provisions Law, which had governed mining rights in Indonesia since 1967. The new law contains a partial framework for replacing KPs with a new system of mining rights called Izin Usaha Pertambangan or IUPs.
In addition, the New Mining Law provides for a new framework for other matters relating to the mining industry in Indonesia including the size of concessions capable of being granted, the calculation of government royalties and the manner in which mining activity is to be conducted (in particular the priority use of local contractors).
The process governing the transition from the old mining law to the New Mining Law, and in particular the KP system to the IUP system, is to be completed by Mining Regulations which the New Mining Law states are to be made within one year.
The Indonesian Minister of Energy and Mineral Resources has made public statements to the effect that KPs will be converted into IUPs under the Regulations when they are issued.
Strike has been working with its Indonesian Legal advisers to determine whether the change in Law is likely to affect its business. Based upon the legal advice received and the public comments made by the Indonesian Minister of Energy and Mineral Resources, Strike believes that the transition between the two legal regimes does not represent a material risk to its Indonesian operations.
Strike is monitoring legal and other developments in Indonesia and any resulting effect on its business activities within the country.
Strike continues to advance the Berau Project through an exploration programme and a definitive feasibility study for a 3 million tonne per annum coal mining operation. The study is expected to be completed by May 2009, at which time a decision will be made on the commencement of mine development. (end of release)