The government has signed 20 mining contract of work (CoW) amendments, consisting of eight mineral CoWs and 12 CoWs for coal (PKP2B), after putting in new clauses to make the miners pay higher taxes and fees to the state.

The Energy and Mineral Resources Ministry'€™s director general of minerals and coal, Bambang Gatot Ariyono, said that with the signing of the amended agreements, both tax and non-tax state revenues would increase.

"There is an opportunity for a non-tax income increase of 150 to 200 percent and a tax revenue increase of 15 to 20 percent from the mineral CoW amendments. As for the PKP2B, there will be an increase in state revenues of 15 to 20 percent from fee payments," he said at the signing ceremony in Jakarta on Wednesday.

Bambang explained that the amendments dealt with six strategic issues, namely working areas, the extension of mining operations, state revenues, processing and refining obligations, divestment obligations and liabilities of labor and the obligation to use domestic goods and services.

Among the companies to have CoW amendments signed are PT Karimun Granit, PT Paragon Perdana Mining, PT Maeres Soputan, PT Iriani Mutiara Mining, PT Tambang Mas Sangihe and PT Gorontalo Sejahtera Mining.

Meanwhile, the 12 coal companies that signed CoW amendments are PD Baramarta, PT Tanjung Alam Jaya, PT Bara Pramulya Abadi, PT Banjar Intan Mandiri, PT Ekasatya Yanatama, PT Sumber Kurnia Buana PT Batualam Selaras, PT Astaka Dodol, PT Baturona Adimulya, PT Selo Agrodedali, PT Selo Agrokencono Sakti and PT Karya Bumi Baratama.

31 contracts

Prior to this, one mineral CoW amendment had been signed in October 2014 and 10 coal CoWs signed in August 2015. In total, there are 31 contract amendments secured, consisting of nine mineral CoWs and 22 coal CoWs.

The Energy and Mineral Resources Minister added that in total there are 34 mineral CoWs and 73 coal CoWs that need to be amended. It means 25 mineral CoWs and 51 coal CoWs are under negotiation.

"There are some issues that must be resolved. We hope that the negotiation process does not take a long time," he told.

The amendment agreements are part of the implementation of Article 169 of Law No. 4/2009 on minerals and coal, which states that mineral and PKP2B contracts that existed before the enactment of the law remain valid until they expire.

Industry Minister Saleh Husein expected the contract amendments will boost the downstream industry of the mining sector amid a weakening of the prices of commodities like coal.

"We will coordinate with the Energy and Mineral Resources Ministry to boost coal and mining value-added products, in a bid to help coal companies to survive," Saleh told journalists. (ags)(+)

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