Mining Bill Passage Imminent
The House of Representatives, or DPR, settled some controversial issues regarding the country’s proposed mining law late on Thursday, including the use of mining permits instead of contracts, which should clear the way for the bill to become law as early as Tuesday, House members said.
Foreign and local mining companies have long been anticipating the mining law, which has been deliberated since 2005.
Disagreements over the mining contract mechanism and the mineral reserves deposit areas had blocked the legislation.
“We made very good progress here, the Golkar Party agreed to use the mining permit instead of mining contracts,” said Yasin Kara, a member of the special committee deliberating the draft law.
“The investors shouldn’t be worried, we have regulations protecting their interests. We won’t just terminate a contract.”
Yasin said that the proposed regulation would likely become law on Tuesday.
In terms of the exploitation of mining concessions, Yasin said the new law would not provide specific time tables for companies.
“Previously, some wanted the mineral reserves to be secured for 20 years with a possible review every five years, but some said the deposit must be available for use anytime,” he said. “We set it up so the Ministry of Energy and Mineral Resources sets the time.”
The ministry, however, must still obtain approval from the DPR and the local government.
Mapping of Indonesia’s mineral deposits will be done after the bill becomes a law. Local governments will be involved in deciding the location, and the central government will propose the areas to the DPR, Yasin said.
The new law will also respect existing mining contracts and, with any adjustments needed for compliance with the new law held off until the contracts expire.
“Coal mining companies would have a year to adjust to the new mining law,” Airlangga Hartarto, chair of the DPR’s energy commission, said on Wednesday. “Mining companies that have to build smelters will have five years to adjust.”
Airlangga added that under the new law, companies would no longer be able to boost investment by exporting raw materials. Companies would have to either build their own smelters or send raw materials to other smelters in the country.
There duration of mining contracts would also be adjusted. At present, mining contracts are granted for 30 years and can be extended for an additional 20. But under the new law, permits would be issued for 20 years and extendable for another 20.
Some of the biggest mining companies in the world have operations in Indonesia, including Freeport McMoRan Copper and Gold Inc., Newmont Mining Corp. and BHP Billiton.
Last week, representatives of four prominent nongovernmental organizations met to urge the government and lawmakers to postpone passage of the new mining law, saying that it would only harm the environment and indigenous communities.
A representative told the Globe that the draft was primarily aimed at granting more mining concessions, which would lead to environmental problems, while including few provisions that would be of financial benefit to governments at the national and local levels.
Foreign and local mining companies have long been anticipating the mining law, which has been deliberated since 2005.
Disagreements over the mining contract mechanism and the mineral reserves deposit areas had blocked the legislation.
“We made very good progress here, the Golkar Party agreed to use the mining permit instead of mining contracts,” said Yasin Kara, a member of the special committee deliberating the draft law.
“The investors shouldn’t be worried, we have regulations protecting their interests. We won’t just terminate a contract.”
Yasin said that the proposed regulation would likely become law on Tuesday.
In terms of the exploitation of mining concessions, Yasin said the new law would not provide specific time tables for companies.
“Previously, some wanted the mineral reserves to be secured for 20 years with a possible review every five years, but some said the deposit must be available for use anytime,” he said. “We set it up so the Ministry of Energy and Mineral Resources sets the time.”
The ministry, however, must still obtain approval from the DPR and the local government.
Mapping of Indonesia’s mineral deposits will be done after the bill becomes a law. Local governments will be involved in deciding the location, and the central government will propose the areas to the DPR, Yasin said.
The new law will also respect existing mining contracts and, with any adjustments needed for compliance with the new law held off until the contracts expire.
“Coal mining companies would have a year to adjust to the new mining law,” Airlangga Hartarto, chair of the DPR’s energy commission, said on Wednesday. “Mining companies that have to build smelters will have five years to adjust.”
Airlangga added that under the new law, companies would no longer be able to boost investment by exporting raw materials. Companies would have to either build their own smelters or send raw materials to other smelters in the country.
There duration of mining contracts would also be adjusted. At present, mining contracts are granted for 30 years and can be extended for an additional 20. But under the new law, permits would be issued for 20 years and extendable for another 20.
Some of the biggest mining companies in the world have operations in Indonesia, including Freeport McMoRan Copper and Gold Inc., Newmont Mining Corp. and BHP Billiton.
Last week, representatives of four prominent nongovernmental organizations met to urge the government and lawmakers to postpone passage of the new mining law, saying that it would only harm the environment and indigenous communities.
A representative told the Globe that the draft was primarily aimed at granting more mining concessions, which would lead to environmental problems, while including few provisions that would be of financial benefit to governments at the national and local levels.