Indonesian Ministry of Energy and Mineral Resources strongly refutes AFP's article

JAKARTA, Mar 10, 2017 - (Antara) - 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 consistently supported adding value to mined metallic minerals by domestic smelting, in line with Law No. 4/2009 on Mineral and Coal Mining, and Government Regulation No. 1/2017, as follow-up to previously issued Regulations;

c. By referring and subjecting to the forgoing Law and Government Regulation, the Government of Indonesia respects all contents of any mining agreement that has been previously agreed to and declared valid;

d. Based on the foregoing, if Contract of Work holders conduct downstream processing within five (5) years of passage the Law of Mineral and Coal No. 4/2009 (article 169 and article 170), they may continue their business and ARE NOT required to convert the Contract to a Special Mining Permit.

e. In such cases that Contract holders have not conducted downstream processing as referred to in Law No. 4/2009, the Government of Indonesia offers to amend the Contract of Work into a Special Mining Permit. According to article 102 and article 103, Law of Mineral and Coal No. 4/2009, they are permitted to export concentrate but must construct a smelter within five (5) years of the issuance of Government Regulation No. 1/2017. The progress of smelter construction will be verified independently every 6 (six) months. If such progress within five years is not reaching minimally 90% of the plan, the export recommendation will be repealed;

f. By achieving a conditional concentrate export permit, the operation may continue, the employment termination may be avoided, and within the next five years the potency of state revenue for Rp 42 trillion and employment for about 45.000 workers will be achieved;

g. Divestment obligation up to 51% as being mandated by the Law is meant to facilitate mining companies in Indonesia to partner with the Government of Indonesia and any other national partners. The most important thing is to bring justice for the people of Indonesia as the absolute owner of mineral resource wealth as the divestment obligation has been regulated in the contract;

h. Indonesia's mining policy in principle prioritizes material justice for all the people of Indonesia as well as maintaining investment sustainability for both foreign and national investment. The Government of Indonesia is negotiating with mining companies to achieve consensus from all parties.

For further information, please contact:

Sujatmiko
Head of Communication,
Public Information Services and Cooperation Bureau,
Ministry of Energy and Mineral Resources
Republic of Indonesia
Tel: +62 81 2801 6414 or email: klik@esdm.go.id

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