Indonesia said it has planned to ease its divestment policy which forced foreign miners to reduce their stake in the mines they operate in the country. The government ruled last year that foreign mining firms must only have no more than a 49% stake in the firm within ten years after the start of production.
The easement on the divesment policy was part of Indonesia's strategy to get more profits from their mineral reserves. Indonesia is the top exporter of thermal coal, nickel ore and refined tin worldwide.
Indonesian Energy and Mineral Resources Ministry Spokesman Saleh Abdurrahman told Reuters through email that the rule would allow foreign miners that make downstream investments to retain more of their holdings. "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. They may divest less than that, depends on the negotiation," he said.
With foreign mining firms like Freeport-McMo Ran Copper & Gold, Newmont Mining Corp, Brazil's Vale SA and France's Eramet having projects in the country, the Indonesian economy gets 12% of its earnings in the mineral sector. However, its policies on divestment, as well its planned ban of ore exports that would begin next year have created uncertainty for foreign miners operating in Indonesia.
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