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Govt, Vale sign contract amendment
The outgoing government sealed an amendment to a mining contract of work (CoW) with nickel miner PT Vale Indonesia on Friday
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The outgoing government sealed an amendment to a mining contract of work (CoW) with nickel miner PT Vale Indonesia on Friday.
The signing was a milestone in the government's attempt to renegotiate a number of mining and coal mining CoWs, which are locally known as KK and PKP2B.
"Vale is the first to finish. We hope others will follow with the new government slated to take office on Monday," Energy and Mineral Resources ad interim Minister Chairul Tanjung said.
Chairul represented the government in the signing of the CoW amendment.
Under the amendment, Vale agreed to reduce its mining-area size to 190,510 hectares from the previous 118,435. It also agreed to pay a higher royalty to the government--2 percent from the previous 0.9 percent. The royalty will be upped to 3 percent with a nickel-price increase.
Moreover, Vale will divest its 20 percent to Indonesian shareholders. Regarding its operations, the company will be allowed to propose an extension under a mining permit two years before its contract expires.
"Vale believes that with this amendment, the company is well positioned to contribute to the development of Indonesia and continue to create shareholder value," said Vale Indonesia president director Nico Kanter. (rcf)
