Jakarta. Indonesia plans to prolong the divestment period for foreign mining companies, Energy and Mineral Resources Minister Jero Wacik said on Wednesday, in what appeared to be a significant adjustment of government mining policy.
Under the rules announced in March, companies must sell down stakes in mines and increase domestic ownership to at least 51 percent by the 10th year of a mine’s production.
Jero said the new divestment period was still under discussion.
“We are going to prolong the [divestment] period,” he said.
Investment chief Chatib Basri told Reuters his ministry would consider a proposal to extend the divestment period to 25-30 years.
He said he had received feedback from investors saying the current period of 10 years was not long enough to justify investments.
Mining companies had said the divestment rules would hurt investment by hitting miners who had already spent potentially hundreds of millions of dollars on exploration.
They also said it promoted uncertainty in the sector which, including coal, is worth $93 billion and contributes 12 percent to the GDP of the largest economy in Southeast Asia.
“The changes to date have already affected sentiment but this would at least mitigate the damage,” said independent analyst Kevin O’Rourke.
Indonesia is a world leader in nickel ore, thermal coal and refined tin exports, while bauxite exports have spiked in recent years.