More firms apply for mining contracts
JAKARTA (JP): More foreign and joint venture companies are applying for contracts of work (COWs) to explore and develop mineral resources in Indonesia, a Ministry of Mines and Energy source said yesterday.
The source said that "in January to April alone, the ministry has received dozens of applications."
The Directorate General of General Mining was processing the applications before submitting them to the minister of mines and energy, I.B. Sudjana, he said.
As of last December the ministry had received 176 applications mostly from Canadian exploration and mining companies.
The applications are to be part of the seventh generation of the ministry's COWs.
The ministry says President Soeharto approved 78 sixth generation contracts of work this month.
The head of the sub-directorate for mining development, Simon F. Sembiring, has corrected The Jakarta Post's report that the ministry would limit COW holders to 62,500 hectares in the seventh generation of COWs.
He said contractors could apply for bigger areas for general surveys but could only retain a maximum 65,500 hectares of contract area at or before the end of the feasibility study.
Mining activities are done in the following phases: general survey (one year), exploration (three years), feasibility study (one year), construction (three years) and production (30 years).
The new regulation stipulates contractors have to relinquish 25 percent of their original contract area to the government at or before the end of the general survey phase.
They then have to relinquish another 25 percent at or before the second year of exploration, and another 25 percent at or before the end of the feasibility study.
After being reduced 25 percent at or before the end of feasibility study, the contract area could not be more than 62,500 hectares, Simon said.
In the past, contractors had to gradually relinquish 75 percent of their original contract area to the government and end up keeping only 25 percent of the area whatever the size was. (jsk)