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espite reports that the prolonged renegotiations of mining contracts will cause state losses, the government and officials from 87 companies have yet to seal a deal.

The Energy and Mineral Resources Ministry'€™s director for minerals, Dede Ida Suhendra, said his office expected to complete and sign amendments on all the mining contracts before the President Susilo Bambang Yudhoyono'€™s administration ended in October.

'€œWe need a little more time to negotiate a number of points. We hope to finish them soon '€” during this Cabinet session,'€ Dede said on Wednesday.

The 2009 Mining Law stipulates that all contract renegotiations need to have been completed a year after the regulation was passed. The sensitivity of the issue, particularly over divestments and royalty increases, however, has slowed the process.

The government completed earlier this month renegotiations with 25 companies, but the remaining contracts with 87 companies are still being deliberated.

The Corruption Eradication Commission (KPK) also said recently that prolonged negotiations, meaning delays in royalty payments, had caused millions of dollars worth in potential state losses.

The KPK cited state losses of US$169 million per year due to a prolonged renegotiation with PT Freeport Indonesia and $65 million per year in the case of PT Vale Indonesia.

The KPK said on Wednesday that it had examined the ministry'€™s mineral and coal directorate general'€™s record of Rp 1.3 trillion ($113.56 million) in state receivables from mining companies'€™ fees and royalties that had not been paid.

The commission said 69 percent of the total receivables, or Rp 905 billion, were attributed to 1,659 firms holding 7,501 mining licenses in 12 of the country'€™s provinces, namely Riau, Jambi, Bangka Belitung, South Sumatra, East Kalimantan, South Kalimantan, West Kalimantan, Central Kalimantan, South Sulawesi, Central Sulawesi, Southeast Sulawesi and North Maluku.

Prolonged renegotiations and the failure to collect royalties properly were among 10 problems that the KPK cited as a result of poor mining management in the country.

The other problems mentioned in the KPK'€™s report include the instruction to mining companies to increase the value of their products by processing minerals in domestic smelters before exporting them, as stated in the Mining Law.

Industry Minister MS Hidayat said the government was seeking a new program that could prove investors'€™ commitment to building local smelters and, at the same time, be feasible to implement.

'€œ[Investors] should give their assurances to convince the government [of their commitment],'€ Hidayat said.

Linda Yulisman contributed to this story.