ndonesian House's Commission VII, who oversees the energy sector, set targets to be able to complete the amending coal mining rules to enforce the implementation of a 2009 mineral law in August 2020 - Photo: Special.

JAKARTA (TheInsiderStories) – Indonesian House’s Commission VII, who oversees the energy sector, set targets to be able to complete the amending coal mining rules to enforce the implementation of a 2009 mineral law in August 2020. The revised law will require miners to convert their mining permits to a licensing system upon the expiration of their current contracts.

The commission chairman Sugeng Suparwoto revealed on Wednesday (12/11) the amending rules will include in the parliament priority legislation program in the Plenary Session, and then it would be discussed intensively early next year.

“The revised law will include in priority legislative program. Next week it will be decided at the parliament’s plenary session. So the intensive discussion on this bill will begin soon,” Suparwoto said at the Indonesia Mining Outlook 2020 event in Jakarta.

The parliament had prepared a working committee to revise the coal mining law, and would immediately work during the trial period in early January 2020, he adds.

Suparwoto assessed that the revision could be discussed quickly. He explained, if the revision usually took place over three-session, then for this revision could be two sessions. So it completes in no later than August 2020, he said.

Suparwoto didn’t dismiss, the amending law was important to be immediately completed considering the rules would become the legal basis for the contract extension of the coal mining work agreement.

Currently, there are seven first-generation miners whose contracts will expire in the next few years. The soonest is PT Arutmin Indonesia whose contract will expire on November 1, 2020. A unit of PT Bumi Resources Tbk (IDX: BUMI) has proposed extending its contract and convert it to a new licensing system, according to Director General of Coal and Minerals Bambang Gatot Ariyono.

Other miners with contracts due to expire include PT Kendilo Coal Indonesia (13 September 2021), PT Kaltim Prima Coal (31 December 2021), PT Multi Harapan Utama (1 April 2022), PT Adaro Indonesia (1 October 2022), PT Kideco Jaya Agung (13 March 2023), and PT Berau Coal (26 April 2025), Ariyono noted.

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. A government regulation now in force, though, allows the development of mining areas beyond that size when a site operator can present the government with a long-term plan of operation, he said.

Indonesian energy and mining resources are also waiting for President Joko Widodo to approve the terms of the new licensing system, including revisions to the tax and royalty schemes. Similar rules have been implemented in the mineral resources sector and have resulted in long, drawn-out negotiations between the government and mining giants, such as Freeport-McMoRan Inc.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com