Sat, 15 Mar 2008
The government announced Friday it had terminated 111 mining contracts since 1999 due to companies' failure to meet contract requirements.

In a press statement, the Energy and Mineral Resources Ministry said 64 of the terminated contracts were for mining firms and the remaining 47 were coal firms.

"Basically, the government honors the sanctity of the contract, but they can be terminated should the firms fail to carry out their obligations as agreed to in the contract,"

"Or if there are corporate criminal acts involved. The contract termination, however, can also based on voluntary cessation requests from the mining firms," said the ministry.

Among the terminated contracts were those for major firms such as Australia-based BHP Billiton and Herald Resources, and Korea-based Kodeco.

The BHP's terminated contracts included mining projects in North Sumatra and East Nusa Tenggara, the ministry said.

The contract for a concession in North Sumatra was terminated in 2001 at the firm's request.

However, the ministry refused to give a reasons for the termination of the contract for a project in East Nusa Tenggara.

As for Herald's contract, the ministry said the firm had asked for a termination.

Energy and Mineral Resources Minister Purnomo Yusgiantoro told reporters that one of Kodeco's contracts was terminated at the company's request, and a second because the company failed to meet contract requirements.

The government revoked Kodeco's contracts for two coal mines in Papua.

"One contract was terminated at their request, and another one was because their failure to meet contract requirements," said Purnomo, without further explanation. --JP/Ika Krimantari



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