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Twenty-seven mineral and coal contracts amended
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Energy and Mineral Resources Minister Ignasius Jonan (middle), State-Owned Eenterprises Minister Rini Soemarno (right) and Energy and Mineral Resources Deputy Minister Archandra Tahar attend a Cabinet meeting at the Presidential Office. (Antara/Rosa Panggabean)
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total of 12 companies with mineral contracts of work (CoWs) and 15 others with coal contracts of work (PKB2B) signed contract amendments with the Energy and Mineral Resources Ministry on Wednesday.
Previously, there had been 37 PKB2B and 21 CoWs that had been amended since the negotiations started in 2010.
Energy and Mineral Resources Minister Ignasius Jonan said that the CoWs and PKB2Bs had to be adjusted to comply with the 2009 Mining Law.
“However, the government will not push for the contract amendments if it will make it impossible to continue operations,” he said during the signing ceremony at the ministry in Central Jakarta.
(Read also: Freeport obtains eight-month special mining permit)
Official data shows that there are still 11 CoWs and 33 PKB2Bs that have yet to be amended. The ministry hopes that the remaining contracts will be amended by the end of the year.
The government believes that the amendments are needed as the old contracts were signed under an outdated law when the country lacked the capacity to manage its own natural resources and relied on foreign investors.
The amendments will include several points to provide greater benefits to the government.
The main issues on the renegotiation table include the adjustment of royalties, mining area sizes, obligations for downstream activities, the continuity of operations after contract expiry, divestment and the usage of local goods and services. (bbn)
