Posted over the road:Indonesia Moves to Limit Foreign Ownership...

Posted over the road:

Indonesia Moves to Limit Foreign Ownership of Some Mines to Stakes of 49%
Indonesia, Southeast Asia’s largest economy, will limit foreign companies from owning more than 49 percent of some mines, potentially limiting investment in the world’s largest thermal-coal and tin exporter. Foreign holders of mining licenses will have to cut their stakes to 49 percent within 10 years of starting production, from 80 percent, according to a decree signed by President Susilo Bambang Yudhoyono on Feb. 21. The change in regulation may deter overseas investment in the country that’s also rich in nickel, copper and bauxite. Indonesia is seeking to increase participation by domestic investors in mining projects, according to the decree. “Mining is a long-term and capital-intensive investment,” said Syahrir Abubakar, executive director of the Indonesia Mining Association, whose members include the local units of Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. (NEM)“If they have to divest within 10 years, they are not yet reaching the break-even point of their investment.” Foreign miners of coal and minerals will need to sell shares to the central and regional governments, state-owned companies or local private companies, according to the decree on the website of the Directorate General of Coal and Minerals. Coal mining will be less affected by the shareholding rule as most of ventures are majority-owned by local investors, Supriatna Suhala, executive director at the Indonesia Coal Mining Association, said by telephone. “The impact will be on minerals, especially on newcomers,” Suhala said. “Mineral investment will require a few billion dollars. People with a few hundred million dollars can invest in coal mining, so this segment doesn’t really need foreign investors.”

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