2012-03-09 14:40:40

In Mine Dispute, Indonesia Stands Ground

An aerial view of a giant mine run by U.S. firm Freeport-McMoran Cooper & Gold Inc., at the Grassberg mining operation, in Indonesia's Papua province in this July 2005 file photo. A new Indonesian regulation that changes the rules on foreign ownership of mines applies to all foreign companies and is not aimed specifically at Freeport McMoRan Copper & Gold Inc, the deputy energy and mining minister said on March 8, 2012. Indonesia's government offered a clearer view on Friday of a new regulation that limits foreign ownership in mines to no more than 49 percent, saying the rule applies to existing as well as new contracts. The comments by senior officials in the Ministry of Energy and Minerals could unnerve foreign companies owning mines in Indonesia, including Australian miners who have played down the impact of the rule signed last month by President Susilo Bambang Yudhoyono. Mining makes up 11.9 percent of the economy in Indonesia, the world's top exporter of thermal coal and tin, and foreign investment in mining in the sector topped $2.2 billion in 2010. Under the rules, Southeast Asia's top economy will require foreign companies to sell down stakes in mines and increase domestic ownership to at least 51 percent by the 10th year of a mine's production. Trade Minister Gita Wirjawan said the regulation would only affect short term investment by foreign miners.

Indonesia

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