Government awards 11 coal deals to local investors

JAKARTA (JP): The government awarded 11 mining contracts of work (COWs) on Wednesday to local firms for coal exploration and mining in several provinces.

Minister of Mines and Energy Kuntoro Mangkusubroto, who signed the contracts on behalf of the government, expressed his appreciation to the investors for their confidence in the mining sector despite the uncertain economic and political situation.

"Today's signing will hopefully attract new foreign investors to our mineral resources," Kuntoro said.

The agreements are based on the third generation of coal contracts which require each of the investors to pay the government a 13.5 percent royalty based on the coal free-on-board sales.

The contracts also impose an annual rent payment, the amount of which depends on a contractor's exploration area. Local administrations will obtain 80 percent of the rent payment.

In addition, the contractors are subject to income and property taxes in line with the 1994 income and property tax laws.

Kuntoro added that the government was currently formulating a fourth generation of COWs in anticipation of the transfer of greater autonomy to provincial and district administrations.

"In future it will be provincial governors, not the minister of mines and energy, who will award mining contracts."

He said mining contractors also would be obligated to give more attention to the welfare of local people.

Utama Hadi Surya, director of PT Selo Argokencono Sakti, one of the 11 contract holders, said he would endeavor to recruit at least 70 percent of his workers locally.

Selo Argokencono obtained a contract to explore 32,930 hectares in South Sumatra.

The other coal mining contractors are PT Karya Bumi Baratama with 32,170 hectares in South Sumatra, PT Teguh Reksa Daya with 44,100 hectares in West Sumatra, PT Abadi Batubara Cemerlang with 94,740 hectares in Riau, PT Sarwa Sembada Karya Bumi with 74,400 hectares in Jambi.

The other six contractors are PT Tanjung Alam Jaya with 9,721 hectares and PT Bangun Banua Persada Kalimantan with 6,960 hectares in South Kalimantan, PT Teguh Sinar Abadi with 99,690 hectares, PT Tempayang Cemerlang with 8,410 hectares, Andhika Mutiara Etam with 71,420 hectares and PT Firman Ketaun Perkasa with 89,290 hectares in East Kalimantan. (03)