South Sumatra vows to uphold mining contracts

South Sumatra Governor Rosihan Arsyad pledged on Thursday to uphold the existing mining contracts in the province and create conducive environment for mining investors during the regional autonomy era.

The governor said in a written statement during a seminar on low-grade coal the province would try to create a conducive environment for mining investors by issuing favorable legislation and helping build infrastructures to support their operations.

The government planned to implement the Autonomy Law early next year, which gives the regions to right to manage their natural resources.

Investors are however worried that the regions would not honor the existing contracts and make various tax regulations to collect lots of revenue.

South Sumatera is home to several major oil and mining operations including Gulf Indonesia Resources, Pertamina, tin mining company PT Timah and coal mining PT Tambang Batubara Bukit Asam

South Sumatera is known to have the country's largest coal reserve. (Alex)