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Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION


COALspot.com - Foreign holders of mining licenses in Indonesia  have to divert 51% of their stakes to Indonesian government or domestic entities within 10 years of starting production,  according to a decree (PP 24/2012) signed by President of Indonesia on Feb. 21.

According to regulation, foreign holders of mining licenses are required to offer their first 20% stakes diversion to Indonesian party within a period no later than 90 (ninety) calendar days after 5 (five) years receipt of mining license (IUP operation and production).

Foreign mining license holders are required to offer their stakes to government of Indonesia, provincial government, local government district / city, state owned enterprises first prior to offer domestic private entities. According to regulations, the government, local government or state owned enterprises have to expressed interest at the latest within 60 (sixty) calendar days from the date of bidding.

In the event the government and the provincial government or local government district / city, state, and local enterprises are not interested to buy divested shares, then the shares can be offered to domestic private enterprises in a period of at least 30 (thirty) calendar days.

Domestic private enterprises have to express their interest at least within 30 (thirty) calendar days after the date of bidding. If domestic private enterprise have decided to buy the shares, then the payment and transfer of purchased shares has to be completed at the latest within 90 (ninety) calendar days after the date finalization of the purchase of shares.

However, If the divestment is not reached within the period stated in the regulation 24/2012, the diversion of shares can be made in the following year.

7th Year of production of completion or 6th years of receipt of IUP OP license,  the foreign owners of mines are required to divert an another 10% or total 30%  of total stakes and 8th years of production 7% stakes diversion, by 9th year of production another  7% and finally 10th years of production 51% of total stakes must hold by either Indonesian government, local government district / city, state enterprises, or national private entities.



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