The War Between Indonesia Law And Australian Miners

Australian miners are playing down the impact of a new law in Indonesia limiting

foreign ownership in mines to no more than 49%, even after a senior Indonesian official said the law would apply to all foreign miners.The government has said it wants Indonesians to have greater ownership of resources in the country, which is the world"s top exporter of thermal coal and tin and has abundant reserves of copper and gold.Those holding what are called "contracts of work" or "coal contracts of work", such as Newcrest Mining, believe those agreements will remain intact until expiry, and reckon so-called IUP mining concessions are the target of the new law.Newcrest, the world"s third-largest gold miner, said on Friday its 82.5% stake in the Gosowong mine in Indonesia would not be affected by the rule, at least until its existing contract runs out."We understand the changes do not apply to the existing contract of work for the Gosowong mine which expires in 2029," said Kerrina Watson, a spokeswoman for Newcrest, which already has an Indonesian partner in Gosowong, PT Aneka Tambang , with a 17.5% stake.A lawyer in Jakarta said that based on comments this week by the director general of minerals and coal, the divestment rule should only apply to new contracts, and may be part of ongoing talks on aligning existing contracts with the new mining law."I would expect some short-term cooling in some immediate investments because it will cause people to reflect upon the economics of their particular transactions," said David Holme, a partner at law firm Allens Arthur Robinson in Jakarta, which has advised BHP Billiton, Rio Tinto and Newcrest.He declined to comment on any company"s specific situation.UNDER REVIEWTop global miner BHP Billiton owns a 75% stake in coal contracts of work in Kalimantan, where it has undeveloped coking coal assets. The company has said it is reviewing the Indonesian president"s statement on the new rule.Other companies already subject to the divestment rule said they have so far not been forced to sell down their stakes.Straits, which owns the Mt Muro Gold mine in central Kalimantan through PT Indo Muro Kencana, a 100% subsidiary of Straits Metals Ltd, has a contract that requires it to offer 51% of the holding company for purchase at fair market value by the Indonesian government."Straits complies with this requirement each year, but has not received any proposal to date," the company said on its web site.Kingsrose Mining under its existing contract of work was supposed to start selling down its 85 percent stake in PT Natarang Mining (PTNM) to 49% from 2012, but that has twice been deferred."PTNM has been advised that it has strong grounds to succeed in deferring the commencement of the divestment obligation to March 2016," Kingsrose Finance Director Timothy Spencer said in a statement to the Australian stock exchange.One company that has said it may be affected is Intrepid Mines, which has an IUP mining concession for its Tujuh Bukit mine. Intrepid said the effect and timeframe for the regulations were subject to interpretation by the government."The company is currently studying these regulations and is considering its best course of action in light of a number of related issues that have yet to be addressed and ongoing discussion with the Ministry of Energy and Mineral Resources," it said in a statement on Friday.Shares in Intrepid shares fell 6% on Friday, while Kingsrose rebounded 4.5% following a drop on Thursday. The major miners" shares were all higher.RIO MUMRio Tinto has declined to comment so far on whether its rights to 40 percent of production from Freeport McMoRan"s giant Grasberg copper and gold mine from 2021 will be affected by the new rule.Freeport McMoRan is seen as the main target of the new law, although the government has said the change will apply to all foreign companies.An Australia-based lawyer said the change in the mining law could have unintended consequences as it could make miners re-think mine development plans in order to mine the best grades early before having to divest their stakes."It doesn"t necessarily lead to the best of mining practices," said Michael Blakiston, a partner at law firm Gilbert & Tobin in Perth, who advises on mining deals.He added that for capital intensive mine developments, there could be concerns about how new local equity partners would be able to foot the bill for major projects.As the professional manufacturer of complete sets of mining machinery, such as Vibrating feeder,Mobile jaw crushers,Screw classifiers, Henan Hongxing is always doing the best in products and service.Classifier:http://www.crusher-machine.com/27.html Cement rotating dryer:http://www.crusher-machine.com/24.html

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