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PrintIt was reported that the Energy and Mineral Resources Ministry may relax divestment obligations for Weda Bay Nickel, a local unit of Paris based Eramet, due to its capital-intensive investment plan for nickel processing facilities in North Maluku.
Weda Bay Nickel, plans to invest up to USD 5 billion building nickel processing facilities, associated with its site in Weda Bay, North Maluku, estimated to contain at least 7,000 kilotons of the mineral.
Mr Thamrin Sihite, the director general for coal and mineral resources at the ministry, said that Eramet will not be asked to divest 51% of its holding.
He said that “We have decided the divestment obligation can be relaxed for integrated mining companies.”
The official was referring to a policy, announced in March last year, that foreign investors must begin divesting their ownership in mining assets in Indonesia in the sixth year of their operation, as the government aims for more local control over natural resources.
From years 6 to 10, a total of 51% of control of a mining operation must be handed over to local entities.
He said that “The issue of divestment for Eramet has already been dealt with at the office of the coordinating minister for the economy. Such a divestment obligation is intended for miners engaging in the upstream side of the business.”
Weda Bay’s investment is favored by the government as it involves adding value to the nation’s natural resources.
Eramet, along with other foreign investors, indirectly controls a 90% stake in Weda Bay with the remainder controlled by state owned Antam.
Mr Thamrin suggested foreign companies owning Weda Bay may need to divest no more than 40% of the company.
That would match Weda Bay Nickel’s existing 51% shareholding of Weda Bay’s upstream business, which is the mining operation.
Mr Susilo Siswoutomo, the deputy energy and mineral resources minister, said that the government is ready to hear any request from companies in natural resources for special incentives but doesn’t guarantee they will be automatically approved.
Weda Bay Nickel, plans to invest up to USD 5 billion building nickel processing facilities, associated with its site in Weda Bay, North Maluku, estimated to contain at least 7,000 kilotons of the mineral.
Mr Thamrin Sihite, the director general for coal and mineral resources at the ministry, said that Eramet will not be asked to divest 51% of its holding.
He said that “We have decided the divestment obligation can be relaxed for integrated mining companies.”
The official was referring to a policy, announced in March last year, that foreign investors must begin divesting their ownership in mining assets in Indonesia in the sixth year of their operation, as the government aims for more local control over natural resources.
From years 6 to 10, a total of 51% of control of a mining operation must be handed over to local entities.
He said that “The issue of divestment for Eramet has already been dealt with at the office of the coordinating minister for the economy. Such a divestment obligation is intended for miners engaging in the upstream side of the business.”
Weda Bay’s investment is favored by the government as it involves adding value to the nation’s natural resources.
Eramet, along with other foreign investors, indirectly controls a 90% stake in Weda Bay with the remainder controlled by state owned Antam.
Mr Thamrin suggested foreign companies owning Weda Bay may need to divest no more than 40% of the company.
That would match Weda Bay Nickel’s existing 51% shareholding of Weda Bay’s upstream business, which is the mining operation.
Mr Susilo Siswoutomo, the deputy energy and mineral resources minister, said that the government is ready to hear any request from companies in natural resources for special incentives but doesn’t guarantee they will be automatically approved.
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