Vale agrees on key issues of contract renegotiation

IDX-listed nickel giant PT Vale Indonesia Tbk has finally agreed on the six main points of contract renegotiation with the government. The company is currently in intensive coordination with the Ministry of Energy and Mineral Resources on the remaining technical matters to finally conclude the contract renegotiation that has been dragging on for years, Bisnis Indonesia reported on Monday.

?Regarding the principle matters we have reached agreement with the government, with technical matters remaining,? Vale Indonesia President Director Nico Kanter said.

Director General of Coal and Mineral at MEMR, R. Sukhyar confirmed that the company has agreed to the entire points of contract renegotiation proposed by the government including on the previously tough issues of contract extension and reduction in the size of mining concession.

Sukhyar said that Vale has agreed to reduce the size of its concessions to 25,000 hectares from 90,000 ha, while with regards to the contract extension, it would be made in accordance with the existing law, and the company?s mining contact of work (KK) would be converted into special mining business permit (IUPK).

The government has been engaged in protracted renegotiation with miners to amend their mining contracts to be in line with the stipulations in the 2009 Mining Law. (*)