By I Made Sentana
JAKARTA--Foreign investors won't meet their obligations to
gradually unload their stakes in local miners to Indonesian
investors via a listing in the Indonesia Stock Exchange.
According to rules announced last year, foreign investors in the
mining sector have to reduce their ownership to at most 80% six
years after production begins, 70% after seven years, 63% after
eight years, 56% after nine years and 49% after 10 years.
But in a new decree signed by the Minister of Energy and Mineral
Resources Jero Wacik earlier this month, but published in the
ministry's website Monday, the government clarified that foreign
investors would not meet their obligations to sell stakes to local
investors by selling shares in the local bourse.
The minister's decree is the implementation of the decree signed
by President Susilo Bambang Yudhoyono last year that sparked
criticism that the government was moving toward economic
nationalism ahead of parliamentary and presidential elections in
2014.
PT Freeport Indonesia, the local unit of Freeport-MacMoran
Copper & Gold (FCX), and PT Newmont Nusa Tenggara, a subsidiary
of Newmont Mining (NEM), have considered selling their stakes in
the local stock market to comply with the regulations.
But several law makers have said that the stakes sold in the
local bourse could end up in the hands of foreign investors
again.
-Write to I Made Sentana at i-made.sentana@dowjones.com