Vale not required to convert permit status to IUPK

Petromindo|Thomas

IDX-listed integrated nickel mining company PT Vale Indonesia Tbk is not required to convert its current mining permit status from mining contract of work (COW) to special mining business license (IUPK) as the company has already been exporting refined mineral products through domestic processing.

Koran Tempo quoted Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources Bambang Gatot Ariyono as saying that only mining companies which are still producing mineral concentrates are required to convert their COW into IUPK as part of conditions for them to resume export.

?Vale is not required to convert into IUPK as the company has been exporting products from its (domestic) nickel smelters,? Bambang said over the weekend.

Indeed, PT Vale President Director Nico Kanter said last week the company will not convert its COW into IUPK until its current mining contract expires in 2025. He said that the COW would be converted into IUPK when the company seeks renewal of the mining permit upon expiry.

The government last month introduced a new mining regulation requiring mining firms such as PT Freeport Indonesia and PT Amman Mineral Nusa Tenggara to convert their COW into IUPK as part of conditions for resuming export of mineral concentrates including copper concentrates, which has been banned since January 12.

The Ministry of Energy and Mineral Resources approved late last week IUPKs for the two mining companies and expect them to apply for the required export permit. But it is still unclear whether the companies agree to the new IUPKs as PT Freeport, for instance, has demanded certain conditions in its IUPK particularly nailed down fiscal terms as it has enjoyed under the COW regime. (*)