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Jakarta Post

Coal giant Bumi secures 10-year extension at S. Kalimantan mines

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Fri, November 6, 2020   /   01:16 pm
Coal giant Bumi secures 10-year extension at S. Kalimantan mines Heavy equipment owned by PT Berau Coal is seen conducting coal mining activities at the Binungan mining site in East Kalimantan. (JP/Indra Harsaputra )

PT Bumi Resources, Indonesia’s top coal miner by output, has been saved by the bell as its subsidiary has secured a 10-year permit extension over a concession in South Kalimantan.

The subsidiary, PT Arutmin Indonesia, secured the permit from the Energy and Mineral Resources Ministry on Nov. 2, just one day after its existing permit expired on Nov. 1. The miner may now exploit the concession until Nov. 1, 2030.

With the permit extension, Arutmin becomes the first of seven old mining giants to receive the legal certainty promised by the long-awaited Coal and Mineral Mining Law, which was only issued in July.

“[This was] the answer to our hopes this entire time,” said Bumi Resources president director Saptari Hoedaja in a statement on Wednesday, adding that the company was “committed to continue complying with applicable laws and regulations”.

“It’s correct,” Energy and Mineral Resources Ministry mining director general Ridwan Djamaluddin said when confirming the extension on Tuesday, kontan.co.id reported.

The energy ministry is still working on three derivative government regulations related to commercialization, spatial planning and land reclamation in the mining industry. The deadline to issue the regulations is June 10 next year.

Lawmakers have admitted to pushing the law’s issuance to this year to protect the seven giants, whose existing permits – technically called coal contracts of work (PKP2B) – are slated to end between 2020 and 2025, starting with that of Arutmin.

For state coffers, contract-based miners pay higher royalty rates than other miners.

Arutmin will retain control over the concession but its permit will change from a contract to a special mining permit (IUPK). Arutmin’s sister company, PT Kaltim Prima Coal, whose contract expires on Dec. 31 next year, is slated to undergo a similar extension process.