JAKARTA, INDONESIA — In regard to the article from Agence France-Presse (AFP) entitled “Jakarta Mining Policy Shift Sparks Turmoil”, published this week in The Business Times of Singapore, ChannelnewsAsia.com and Todayonline.com among others, the Ministry of Energy and Mineral Resources of the Republic of Indonesia would like to state its concerns and objections as follows:
1. The article title is misleading.
2. The news is tendentious and imbalanced, and discredits the Government of Indonesia.
3. We hereby present our objections in detail and share our explanations:
a. The Government of Indonesia encourages and fully supports any investment in Indonesia, both foreign and local, without exception.
b. The Government of Indonesia has been consistent in supporting added value for metallic minerals in domestic downstream processing, in line with Law No. 4 of 2009 on Mineral and Coal Mining (Law 4/2009) and Government Regulation No. 1 of 2017 (GR 1/2017), the follow-up and revision to previously issued Regulations.
c. Subject to Law 4/2009 and GR 1/2017, the Government of Indonesia thereby respects the content of any mining agreement that was previously agreed to and declared valid.
d. In view of the foregoing, if Contract of Work (‘CoW’) holders conduct downstream processing within five (5) years of Law 4/2009 promulgating, they may continue their business and ARE NOT required to convert the CoW to a Mining Business Permit (‘IUP’).
e. In cases where CoW holders have not conducted downstream processing as referred to in Law 4/2009, the Government of Indonesia offers to convert the CoW into a conditional IUP. According to Law 4/2009, Articles 102 & 103, IUP holders are permitted to export concentrate but must construct a processing or smelting facility within five (5) years of the promulgation of GR 1/2017. Progress in smelter construction will be verified independently every six (6) months; if progress within 5 years has not reached 90% of plan, the export permit will be repealed.
f. By achieving a conditional permit to export concentrate, foreign mining operations may continue for 5 years, employment termination may be avoided, and potential state revenues of Rp 42 trillion and employment for roughly 45,000 workers will be achieved.
g. The divestment obligation of up to 51% as mandated by GR 1/2017 is meant to facilitate the partnering of foreign mining companies with the Government of Indonesia or any other national partners. The most important principle is maintaining justice for the people of Indonesia as absolute owner of the mineral wealth, as mandated in the divestment obligation of the IUP contract.
h. Indonesia’s mining policy in principle prioritizes material justice for the people of Indonesia and maintains investment sustainability for both foreign and national investors. The Government of Indonesia is negotiating with mining companies to achieve consensus from all parties.