Vale Indonesia, the largest nickel matte producer in the country, remains optimistic it will conclude its mining contract renegotiation with the government sooner rather than later, ahead of heated national elections next year.
Nico Kanter, president director of the company, told reporters on Tuesday that in the past two months “there has been good progress” in talks with the government.
Mining companies are required to renegotiate mining contracts as the government aims for more benefit from the mining sector as well as creating downstream industries.
“We maintain our belief that we can be the first multinational company to conclude this renegotiation,” Kanter said. “There is an opportunity to finish before the April election.” Vale Indonesia is 59 percent owned by Vale Canada, a unit of Brazil’s Vale.
Indonesia is set to hold legislative and presidential elections in April and July respectively. Kanter said that if a new contract could not be concluded before the election, there was possibility that it may be stretched into 2015.
He said detailed discussions on the six points the government wanted to be renegotiated, including area, royalties, contract length and local value-added processing, were ongoing.
“The conclusion of the talks will send a positive message to foreign and local investors who see Indonesian mining as an industry with too many uncertainties,” Kanter said.
The company will only commence its $2 billion investment in Central and Southeast Sulawesi when the contract has been finalized, he added.
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