Indonesia court ruling on mining law wont deter companies extending licences

Indonesian coal miners said on Monday that a Constitutional Court ruling last week removing guarantees onminingcontract extensions wont put them off applying to extend their licences.

Indonesias 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 countrys 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.

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

From the perspective of business practitioners, the Constitutional Courts decision does not reduce the right of the coalminingcontract holders to apply for a contract extension which will be converted into a specialmininglicense, 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 privateminingcompany ends with the expiry of theirminingcontract and that the government should not prioritise certain companies for newminingpermits.

Theminingministry did not respond on Monday to Reuters seeking comments.

As long as aminingcompany 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.