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Indonesia’s MEMR Offers 6 Mining Blocks to SOEs

Energy and Mineral Resources Minister Ignasius Jonan and Other Officials - Photo by MEMR Office

JAKARTA (TheInsiderStories)—Indonesia’s Ministry of Energy and Mineral Resources (MEMR) offered six expiring special mining license areas to the state-owned and regional-owned companies.

The MEMR’s Mineral and Coal Director General Bambang Gatot Ariyono on Thursday (21/06) said the offer has been submitted in early June 2018. The government currently is waiting for the responses from state-owned and city-owned companies.

According to the Energy and Mineral Resources Ministerial Regulation No. 11/2018, the state-owned companies should respond within 30 days. “If the state-owned and city-owned companies are not interested, it will be auctioned,” he said.

If the state-owned and city-owned companies accept the offers, they should comply with all financial and administrative requirements to operate in those special mining license areas.

In addition, MEMR also has submitted data on the 10 mining license area that will be auctioned by the governors. Ariyono was unable to confirm the details of the time of the auction.

Furthermore, other potential areas are still being evaluated by the MEMR before to be offered or open tender. It is expected that there will be additional areas this year.

Meanwhile, President Director of state-owned mining company PT Aneka Tambang Tbk (IDX: ANTM) Arie Prabowo Ariotedjo confirmed that the government has offered special mining license areas to the company on 6 June 2018. The government offered five special mining license areas formerly owned by PT Vale Indonesia.

The company currently is in the finalization stage to determine which areas are to be taken over. The company targets to deliver a decision to the government on July 17-18. The company will only receive the areas that are profitable according to the available data.

Furthermore, President Director of state-owned mining company PT Bukit Asam Tbk (IDX: PTBA) Arviyan Arifin showed the interest to take over the mining areas offered by the government. However, the company is still evaluating which mining areas are profitable.

The mining commodities price continues to increase this year after reaching the lowest level in 2015 and 2016. This price rebound pushes the investment in the mining sector.

The government revised down its investment target in the energy sector by 25.7 per cent to US$37.2 billion this year from an initial target of US$50.12 billion amid weak investors’ appetite. The government targets US$6.2 billion investment in mining sectors this year.

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