Proposed COW changes not final: Sudjana

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana said yesterday that the government's proposed changes to seventh generation mining contracts of work (COW) were not yet final.

"The amendments are still being discussed at staff level," Sudjana was quoted by Antara as saying after a meeting of economic ministers to prepare for the monthly cabinet session on economic affairs tomorrow.

He said that since his staff had not yet given him a final draft of the proposed changes he could not say how many shares foreign mining contractors would have to give the government under the new contracts.

The government's intention to change several principal terms in seventh generation COWs was revealed when mining officials summoned foreign contractors to a briefing last Tuesday.

The meeting was followed by another briefing session Thursday of companies applying for coal mining contracts.

Contractors were reportedly given until today to respond to the government's proposals which called for, among other things, government equity of at least 10 percent and a share in capital gains generated by public share offerings.

State Secretary/Minister Moerdiono, apparently in an attempt to remove confusion over the proposals, said again last week that the ruling that allowed wholly-owned foreign companies to operate in the mining sector and other sectors of the economy would not be changed.

Moerdiono said he did not know of any ruling that would make it compulsory for foreign mining contractors to give an equity stake to the government at the outset of commercial operations.

Director General of Mines Adjat Sudradjat also said last Friday that the proposed changes covering 17 points in the seventh generation COWs were not set.

"The proposed changes are negotiable," Sudrajat told reporters again yesterday.

Most foreign companies were stunned by the government's move, saying the proposed changes were entirely unacceptable as the draft contracts were initialed last year.

Under mining sector licensing procedures, the mining minister must consult the House on contracts before they are approved by the President.

Discussions on the proposed COW amendments are expected to dominate the working session with Sudjana and the House's commission dealing with mining and industry today. (vin)