Reuters reported that Indonesia is considering whether to extend a divestment deadline for foreign mining companies beyond 10 years but no decision has been made.
Mr Hatta Rajasa chief economic minister of Indonesia said that the government of Southeast Asia's largest economy has issued a series of mining rules this year in a bid to reap more profit and promote domestic industry but investors have complained about policy uncertainty and the latest comments appeared to contradict a statement by another minister.
Mr Jero Wacik energy and mineral resources minister of Indonesia said that the government had already decided to extend the deadline under which companies must sell down stakes in mines and increase domestic ownership, making conditions more favorable for foreign owners.
Mr Rajasa coordinates economic policy in President Mr Susilo Bambang Yudhoyono's government. Companies must sell down stakes in mines and increase domestic ownership to at least 51% by the 10th year of a mine's production. The divestment rule announced in March is part of a global trend for mineral producing countries to push for more cash and clout.
Indonesia is a leader in nickel ore, thermal coal and refined tin exports, while bauxite exports have spiked. Overall, the mineral sector including coal is worth USD 93 billion and contributes 12% to Indonesia's gross domestic product. The country is favored by emerging market investors and recently regained investment grade status.
Mr Rajasa said that there's an idea to extend the divestment period beyond 10 years but no decision has been made yet. The settlement of contract renegotiation remains a priority.
He was referring to talks between the government and some of the most prominent mining companies operating in Indonesia including Freeport McMoRan Copper & Gold, Newmont Mining Corporation and PT Vale Indonesia Tbk.
Source - Reuters
