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Saturday, 13 February 10
INDONESIA ISSUES NEW MINING REGULATIONS


Indonesia has issued two new regulations under its mining law to allow firms to start obtaining mining permits, in a move that should increase certainty and help boost investment in the mining sector.

The new regulations - one covering mining areas and the other on mining business - should allow investors to obtain new mining permits and help speed up issuance for existing investors.

"The regulations were issued yesterday but will be applied retroactively from February 1," Bambang Gatot Ariyono, director of coal and mining business at the energy and mining ministry, told reporters.

"We issued them quickly because of concern about mining licensing," Ariyono said.

“The regulations were issued yesterday but will be applied retroactively from February 1” - Director of Coal and Mining Business

The government had stopped issuing new permits ahead of the introduction of the regulations.

Miners who had applied for a contract before a new mining law was passed in December 2008 will be able to continue their application.

The regulations will also allow the government to start tenders in mining areas.

Budi Irianto, a spokesman for the Indonesian unit of global miner Rio Tinto, said the issuance of the regulations could help the firm's nickel project obtain a long-awaited mining permit.

"We have submitted an application for a mining licence. With the new regulations out, we hope we can get the licence this year," Irianto said.

Rio Tinto launched an application for a mining contract of work - a type of mining licence under the previous mining law - in 1999 for its $2 billion nickel project on Sulawesi island.

But when the new coal and mining law was passed the firm was required to apply for a shorter-term mining permit.

The Sulawesi nickel project is expected to have a capacity of 46 000 t/y.

The government awarded the last contract of work to Australia's Indo Mines for its pig iron project in November 2008, a month before the new mining law was passed in December.

Indo Mines was also the first mining firm to sign a mining contract for a decade.

Southeast Asia's largest economy has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations tied to a new mining law passed in 2008.

The government has said it expected mining investment to hit $2,5-billion next year, up from $1,81-billion in 2009, supported by greater certainty after the introduction of new mining regulations.
Source: Reuters / Mining Weekly



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