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The mining bill cannot be endorsed as scheduled as the
government and legislators are still at loggerheads over the
transitional arrangements, a source close to the negotiations says.
The transition period is a period granted to the holders of existing
contracts of work (CoW) in order to allow them to switch to the new
permit system stipulated under the bill.
The government has repeatedly said that it wants the bill passed into
law by the end of this year in the hope of providing a clearer
regulatory framework and greater certainty for firms wishing to invest
in the mining sector next year.
However, R. Sukyar, a government representative involved in the
drafting of the bill, said Tuesday that the debate on the transition
period had become stalled in the working committee, with some lawmakers
questioning whether other requirements set out in the bill would also
be imposed on existing CoW holders.
"Those requirements include the obligation on miners to set up
refineries or smelters in Indonesia, thus producing added value for the
economy, rather than simply exporting the raw ores they produce,"
Sukyar told The Jakarta Post.
He said that he hoped the debate would be resolved as soon as possible,
citing January as the most feasible deadline. "The sooner the better
for us as it would be very good for investment."
Speaking on other provisions of the bill, Sukyar said that the
committee had agreed on a number of pressing issues, including the
introduction of a permit system under which a mining firm planning to
establish a new business would be obliged to secure two mining permits
-- exploration and exploitation -- from the local administration.
This provision had earlier drawn protests from the corporations as it
will make the process of obtaining the licenses and other permissions
more complex.
The committee then decided to insert a provision on special mining
permits, which will be similar to the current contract of work (CoW)
format, for big mining projects worth more than US$250 million.
Under the bill, the government will establish a special agency
specifically tasked with issuing such permits.
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