Govt signs three contracts, renews two others in mining

JAKARTA (JP): Minister of Energy and Mineral Resources Purnomo Yusgiantoro signed three contracts on Wednesday for the development of the country's coal resources, and renewed two contracts for the development of Indonesia's tin and granite resources.

The minister awarded contracts to PT Ratah Coal, PT Lahai Coal and PT Juloi Coal, and renewed the contracts of tin mining firm PT Koba Tin and granite mining company PT Karimun Granite.

"The signing of these contracts confirms Indonesia is still an attractive country for investment, particularly in the coal sector, even though we are currently going through the process of political reform and economic restructuring," Purnomo said in a speech.

Ratah, Lahai and Juloi are 99 percent owned by Australian company BHP Minerals Holdings Pty Ltd., with the remaining 1 percent owned by its sister company BHP Minerals Asia Pacific Pty Ltd.

According to Simon Sembiring, the ministry's chief negotiator during the contract talks, Ratah was awarded a contract area of approximately 100,000 hectares in North Barito regency, Central Kalimantan, and in West Kutai regency, East Kalimantan.

Simon said Lahai was given a contract area of some 98,000 hectares, also located in North Barito and West Kutai regencies. And Juloi received a contract area covering 192,000 hectares in North Barito regency.

Simon explained that under their coal contracts, the three firms had to submit 13.5 percent of their coal production in cash to the government, and also pay taxes to the government in accordance with existing tax laws.

He added that the three contractors were fully responsible for the management of their operation areas.

Simon also said the mining companies must prioritize the recruitment of locals and provide training programs, and also protect the environment.

Kobatin is 75 percent controlled by Australian firm Kajuara Mining Co. Pty Ltd., with the remaining 25 percent owned by publicly listed state-owned tin mining firm PT Tambang Timah.

Karimun Granite is owned by a consortium comprising Hong Kong- based firms Seville Row Developments Ltd. (2.5 percent) and Eastern Fortune Ltd. (2.5 percent), and local firms PT Pendawa Sempurna (77.75 percent) and PT Tatawahana Duta Persada (17.25 percent).

Simon said Kobatin was first awarded a contract in 1971 with a focus on the mining of tin ore on Bangka island in South Sumatra.

He said the company now had a total production of around 10,000 tons of tin per year, while its total investment as of 1999 reached US$92 million.

Kobatin's previous contract, which was to expire on March 30, 2003, was extended for 10 years.

Simon said Karimun was first awarded a contract in 1971 with a focus on granite mining on Karimun island in Riau province.

He said the company began production in 1974 with current annual output reaching four tons of granite. The company has invested a total of $57.5 million in its operation.

Karimun first extended its contract in 1993 for 10 years, and has now received another 10-year extension.

The extended contracts were based on the seventh generation contract of work, under which the companies must pay taxes according to the current tax laws. (rei)