Govt to Consider Mining Companies’ Business Permit Regulation
Jakarta. The government will revise a 2014 regulation on minerals and coal mining to provide legal certainty for ongoing investments in the sector, a minister said over the weekend.
Energy and Mineral Resources Minister Sudirman Said said that a 2014 decree (No. 77) stipulates that mining contracts are allowed to propose permit extension — two years before the contracts expire at the soonest or six months before they expire at the latest .
He said the government would revise the aforementioned clause to provide business certainty for investors. The ministry is currently studying the regulation.
“The two-years contract extension proposal does not make any sense considering the huge investment [involved]. It needs to be reviewed,” he told reporters in Jakarta.
Sudirman claimed that the revision is not only meant for Freeport Indonesia, a local unit of US mining giant Freeport McMoRan. The revision, he stressed, is to guarantee the investment certainty in the minerals and coals sectors generally.
He added that the planned revision is also based on a 2015 presidential decree on a policy of natural resources management for the betterment of the Papuan economy. The revision will follow the path of the presidential decree headed by the National Development Planning Agency (Bappenas) and the minerals and coal team at the Energy Ministry.
Meanwhile, the director general of minerals and coals at that ministry, Bambang Gatot, said there were several options in determining the limit of permit extension. One of the options, he said, is by considering the number of investments.
“Is it normal if [a company] with big investments must propose the extension two years before the contract expires?” he said.
Similar to Sudirman, Bambang denied that the revision was related to Freeport’s permit extension.
“We want to revise the regulation not only for one company, not to entertain Freeport but to give an impact to all mining companies,” he said.
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