Indonesia passes new mining law revisions, met with praise and protest

JAKARTA, May 12 (Reuters) - Indonesia’s parliament passed revisions to its mining law on Tuesday that will allow miners to extend permits and seek expansion of mining areas beyond current legal limits.

Other parts of the law are also largely in line with mining rules under a proposed sweeping “omnibus” bill, aimed at removing red tape and attracting investment in many business sectors.

The government and a parliamentary committee overseeing mineral resources agreed on the revisions on Monday.

“I hope this revisions will solve current problems and future challenges of mineral and coal mining governance/management, shift paradigm on mining activities from selling raw materials to goods with added value and give law certainty.” energy minister Arifin Tasrif told parliament.

Mining firms said the revisions would improve investor sentiment but were also met with protesters outside parliament.

“If the investment climate here is not good, Indonesia will be less attractive to Australia and other countries,” Garibaldi Thohir, CEO of PT Adaro Energy told Reuters.

He added that Adaro, Indonesia’s second-largest coal miner, will request an extension of a permit due to expire in 2022 next year.

Indonesia has looked to attract foreign investors by creating a full nickel supply chain, starting from extraction, processing into metals and chemicals used in batteries, all the way to building electric vehicles.

Indonesia, a major producer of nickel, tin, and copper, under a ministerial regulation currently allows exports of some raw mineral until January 2022, but has banned exports of nickel ore starting this year.

While the new law allows ore miners who are building smelters to export ore for the next three years, it also added that the government can rule against the export of specific ores under a separate regulation.

The new revisions however, sparked some opposition from transparency watchdogs and rights groups.

They are concerned about the environmental impact of allowing larger mining areas as well as supervision issues associated with moving authority away from regional governments to the capital.

Maryati Abdullah, national coordinator of transparency watchdog Publish What You Pay, told Reuters earlier on Tuesday that some non-government associations may apply to the constitutional court for a judicial review. (Writing by Fathin Ungku; editing by Jason Neely)