Foreigners May Have To Sell 20% Of 100%-Owned Indonesian Mines
June 29 2009 - 10:56PM
Dow Jones News
Indonesia may require foreign companies to sell 20% of any
wholly-owned mines in the country to local investors within 10
years of the start of production, an official said Tuesday.
"The divestment will start in the sixth year of production, with
5% of the stake to be divested every year," Bambang Gatot, the
director of minerals, coal and geothermal at the Ministry of Energy
and Mineral Resources told Dow Jones Newswires.
The government may enact the new ruling by October, Gatot
said.
The parliament in December passed a new mining law that requires
divestment of foreign ownership to a maximum of 80%, but left it to
the government to decide on the details.
Prior to the new law, the government required only certain
foreign investors to sell stakes in their mines in Indonesia to
local buyers.
In several cases, the divestment didn't go through smoothly. For
example, the government and Newmont Mining Corp. (NEM) last year
decided to go to international arbitrators after they failed to
agree on the divesture of part of the U.S. miner's holdings in a
gold mine in Sumbawa Island.
-By Deden Sudrajat, contributing to Dow Jones Newswires; 62-21
39831277; I-Made.Sentana@dowjones.com