Indonesia court ruling on mining law won’t deter companies extending licences

Komatsu bulldozer pushing coal in Ljubljana – Image courtesy of Wikimedia Commons

Indonesian coal miners said on Monday that a Constitutional Court ruling last week removing guarantees on mining contract extensions won’t put them off applying to extend their licences.

Indonesia’s Constitutional Court ruled last week that guaranteeing mining permit extensions was unconstitutional and that a part of the 2020 mining law would be revised.

The 2020 mining law was aimed at boosting investment in the country’s rich mineral resources sector and contained a clause whereby the operating licences of mining companies working under the old contract system would be guaranteed an extension and converted into the new mining permit system.

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The court ruled that such extensions “can be given” to miners but shall not be “guaranteed”.

“From the perspective of business practitioners, the Constitutional Court’s decision does not reduce the right of the coal mining contract holders to apply for a contract extension which will be converted into a special mining license,” said Hendra Sinadia executive director of Indonesia Coal Miners Association told Reuters.

The court case was filed last year by civil groups which argued that guaranteeing contract extension for miners goes against an Indonesian constitutional tenet stating that natural resources must be controlled by the state for the benefit of the Indonesian people, court documents showed.

The court said that any legal relation between the government and a private mining company ends with the expiry of their mining contract and that the government should not prioritise certain companies for new mining permits.

The mining ministry did not respond on Monday to Reuters seeking comments.

As long as a mining company complies with the laws and regulations and fulfil the requirements, the company has the right to get an extension in the form the new permit system, Hendra added.

(By Bernadette Christina Munthe and Fransiska Nangoy; Editing by Susan Fenton)

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