(Adds details, context)
By Wilda Asmarini
JAKARTA, Jan 17 (Reuters) - Indonesia's mining ministry on
Wednesday signed amended contracts with 18 coal mining
companies, including PT Adaro Indonesia, as part of a
shift towards a new mining permit system it expects to boost
Indonesia, the world's biggest thermal coal exporter, has
now amended the contracts of all of its 68 coal mining
companies, marking a victory for the government after earlier
resistance from some miners to adopt the new terms.
Indonesia's 2009 mining law requires companies to transfer
from so-called contracts of work, long-term agreements with
specific rules including on taxes, to newer special mining
permits that generally follow the prevailing law.
Along with Adaro, Indonesia's second-biggest coal miner, the
other companies that signed included PT Santan Batubara, a unit
of Indika Energy, and PT Pendopo Energi Batubara, a
unit of Bumi Resources.
"With these amendments companies will also benefit in the
long run, if we sign while the coal price is high. If (prices
are) low, it's harder to sign," Minister for Energy and Mineral
Resources Ignasius Jonan said at the signing ceremony.
Under the amendments, coal mining companies agreed to pay
13.5 percent royalties on coal sales as a cash lump sum.
With the amendments, miners will also be able to secure a
continuation of rights to their operations up to two years
before their current contracts expire, after which they will
transfer to special mining permits.
Amendments for so-called "generation 1" contracts of work
also increase land rent to $4 per hectare from $1 per hectare.
State revenue is expected to rise by around $27 million per
year after the amendments of the 18 coal companies and one gold
miner PT Indo Muro Kencana, the ministry said.
Indonesia's transition from contracts to permits has been
rocky and complex, at times throwing the mining sector into
turmoil. The changes have sparked several lengthy disputes,
including with U.S. giant Freeport Freeport-McMoRan Inc
over divestment and other issues related to the new permit.
Freeport Indonesia, which owns the majority rights to
Grasberg, the world's second-biggest copper mine, has now
reached a framework agreement on a new mining permit although
issues still need to be ironed out.
Bambang Gatot Ariyono, director general of coal and
minerals, said on Wednesday that nine other companies holding
contracts of work had yet to sign amendments because there was
still no deal yet on state revenue and divestment.
(Writing by Ed Davies; Editing by David Evans)
First Published: 2018-01-17 12:14:50
Updated 2018-01-17 13:48:58
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