Business – Indonesia rule change rattles foreign mine owners @ Wed Mar 07 2012
http://www.themalaysianinsider.com/business/article/indonesia-rule-change-rattles-foreign-mine-owners
- Newmont and partner Sumitomo Corp, which run the country’s second-biggest copper mine, have already been required to sell 51 per cent in the mine to local state and private investors. The sale of the final 7 per cent to the central government last year drew attacks from opposition lawmakers from the Golkar Party, who said it should go to local government. The family of Golkar chairman Aburizal Bakrie already indirectly owns 24 per cent of the mine through a consortium with local governments. The new regulation calls for foreign firms to first offer stake sales to central government, followed by local government and state-owned enterprises, with private domestic firms able to win any leftovers via auction. “As the divestment process with Newmont showed, (it) is far too easy to be hijacked by powerful business interests who may not have the best interests of the mine at heart,” said risk analyst Keith Loveard of Jakarta-based Concord Consulting. A recent spat between Nat Rothschild, scion of the European banking dynasty, with his Indonesia partners the Bakrie Group, over boardroom control of Bumi Plc also shows an increasing tussle for control for some of the world’s richest mines.
WXEL: Indonesia says mine rules not just aimed at Freeport (2012-03-08)
http://www.publicbroadcasting.net/wxel/news.newsmain/article/0/0/1911044/Business/Indonesia.says.mine.rules.not.just.aimed.at.Freeport
- The new status could boost calls already growing in the country for a more assertive attitude towards partnership with foreign companies, particularly in the resources sector where last year there were several cases of violent clashes over land rights. Freeport alone contributes 1.6 percent of Indonesia’s gross domestic product and, according to the statistics bureau, the mining sector as a whole made up 11.9 percent of the economy in 2011. « Many in Indonesian politics and the public see that Freeport and some other cases are not fair to Indonesia. The principle is that we need to implement that law. But how much and how fast – that is still under the ministry of mining and energy, » Deputy Trade Minister Bayu Krisnamurthi said. « We still believe, even with only 49 percent, it (the mining sector) is still very alluring, still very lucrative for everybody. In some countries, this industry is prohibited from international investors. » Some analysts and mining industry sources said inconsistent policy-making could threaten growth in the sector, which was shaken by a rule last month that companies must stop exporting some unprocessed raw metals in 2014. Coal was exempted. « Fitch believes Indonesia will take a pragmatic approach to industry regulations as failing to do so can have negative consequences for the sector in the long-run, » the ratings agency said in a special report on Thursday.
Indonesia says mine rules not just aimed at Freeport
http://www.baltimoresun.com/business/sns-rt-us-indonesia-miningbre8270mc-20120308,0,2193741.story
- Freeport is negotiating to renew its royalty contract to run the Grasberg mining complex, which has the world’s largest gold reserves and is the second-largest copper mine. The regulation could be an attempt by the government to increase pressure on Freeport, some analysts said. One source with knowledge of the industry said local mining companies stood to gain.
UPDATE 2-Indonesia to limit foreign ownership in mines – Finance News – London South East
http://www.lse.co.uk/FinanceNews.asp?ArticleCode=cbkp8g2b55tnafo&ArticleHeadline=UPDATE_2Indonesia_to_limit_foreign_ownership_in_mines
- Under new rules announced on the energy ministry’s website, Indonesia will force foreign firms to sell down stakes in mines by the 10th year of production and increase domestic ownership to at least 51 percent. Southeast Asia’s largest economy contains some of the world’s richest mineral deposits and its fast-growing mining sector accounts for more than a tenth of GDP. Grasberg on eastern Papua island is the world’s largest gold mine.
Indonesia to Limit Foreign Ownership in Local Mines to 49%
http://www.bloomberg.com/news/2012-03-07/indonesia-moves-to-limit-foreign-ownership-of-some-mines-to-stakes-of-49-.html
- Indonesia, Southeast Asia’s largest economy, will limit foreign companies from owning more than 49 percent of some mines, potentially limiting investment in the world’s largest thermal-coal and tin exporter. Foreign holders of mining licenses will have to cut their stakes to 49 percent within 10 years of starting production, from 80 percent, according to a decree signed by President Susilo Bambang Yudhoyono on Feb.
Mining rule change could ‘cost Indonesia’
http://asia.legalbusinessonline.com/news/breaking-news/mining-rule-change-could-cost-indonesia/108002
- The issuance of Indonesia’s recent presidential decree instructing foreign mining investors to reduce their share ownership from 80 percent to 49 percent within 10 years from the date of production commencement may have a negative impact on the country’s investment climate, say lawyers interviewed by ALB.
Indonesia moves to nationalize mines
http://www.edmontonjournal.com/business/Indonesia+moves+nationalize+mines/6269022/story.html
- Indonesia will take more of the profits from its vast mineral resources by limiting foreign ownership of mines in a move likely to scare off new investment in the world’s top exporter of thermal coal and tin. Under new rules announced on the mining ministry’s website, Southeast Asia’s largest economy will require foreign companies to sell down stakes in mines and increase domes-tic ownership to at least 51 per cent by the 10th year of production