JAKARTA, Sept 5 Indonesia plans to relax a rule
forcing foreign miners to sell majority stakes and allow those
who make downstream investments to keep bigger holdings, a
spokesman at the Energy and Mineral Resources Ministry said on
Last year, the Indonesian government said foreign companies
must reduce their stake in a mine to 49 percent or less within
10 years of production starting, though it has been unclear how
the rules will be applied.
The rule was part of a push by Indonesia, which is the
world's top nickel ore, refined tin and thermal coal exporter,
to generate more profits and influence in commodities markets.
"For those companies that integrate the upstream and
downstream mining activities, they may have that divestment
relaxation policy. Instead of divesting 51 percent to be
achieved on year 10 of its activity," ministry spokesman Saleh
Abdurrahman said in an email.
"They may divest less than that, depends on the
negotiation," he said, adding there would be a revision to the
current government regulation. He gave no timeframe for the
change, but new regulations and rules can often get delayed in
the lengthy Indonesian legislature system.
The mineral sector including coal contributes around 12
percent to Indonesia's economy. Foreign firms with mining
projects in the country include Freeport-McMoRan Copper & Gold
, Newmont Mining Corp, Brazil's Vale SA
and France's Eramet.
The divestment rules and a ban on ore exports from January
2014 have resulted in uncertainty for miners and dented the
country's credibility with foreign investors.
Eramet said in February it was not prepared to give up
majority control of its Weda Bay nickel project and delayed a
final investment decision to the second half of 2014.
The French company controls about 60 percent of the project,
alongside Japanese firms Mitsubishi Corp and Pacific
Metal Co Ltd, and Indonesian state-owned mining firm PT Antam.
Last month, Indonesia's government unveiled a fiscal package
to promote foreign investment, reduce imports and quotas and
prop up its tumbling rupiah currency.