Indonesia coal miner Arutmin seeks contract extension, says ministry

JAKARTA, Nov 28 (Reuters) - Indonesian coal miner PT Arutmin Indonesia, a unit of PT Bumi Resources, has proposed extending its contract and converting it to new licensing system, the energy ministry said.

According to a 2009 mining law, coal miners in Indonesia are required to convert their contracts of work, which are long-term deals that include specific tax rules, to new special mining permits known as IUPK, that broadly follow prevailing law.

The ministry’s Director General of Coal and Minerals Bambang Gatot Ariyono told a parliamentary hearing that Arutmin, whose existing contract is due to expire in November 2020, had proposed converting its contract to an IUPK.

Ariyono said a regulatory change was needed to address uncertainties over the size of areas that can be operated by a coal miner under the new system.

The 2009 mining law allows operations on a maximum of 15,000 hectares. Artumin mines more than 57,000 hectares.

Asked whether companies such as Arutmin would be required to shrink their mining area, Ariyono said: “We will wait for the regulation.”

He also said the contract of another Bumi unit PT Kaltim Prima Coal would expire by the end of 2021.or

Other miners with contracts due to expire include PT Adaro Indonesia’s South Kalimantan operation with a 2022 expiry, Kideco Jaya Agung in East Kalimantan with 2023 expiry and PT Berau Coal Energy with a 2025 expiry, Ariyono said. (Writing by Fransiska Nangoy; Editing by Edmund Blair)