Indonesian Government shocks miners with new laws

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The Indonesian Government has shocked mining companies by introducing new laws that threaten to bring billions of dollars worth of projects under Government control.

According to The Sydney Morning Herald the laws will force some companies to only control a maximum of 49 per cent of their projects.

The sell-off must be completed by the tenth year of production and will focus on approvals granted after 2009.

Deloitte mining Indonesia advisor Julian Hill told AFP the decree would deter foreign investors from working in the country.

"It effectively means foreigners are going to lose control after 10 years. It’s going to make Indonesia a lot less attractive to foreign investors, as if it wasn’t already," he said.

The number of companies affected by the ruling remains unknown, but the director-general of Indonesia’s Energy and Minerals Department has previously said the laws would not apply to existing projects already producing.

BHP Billiton, Rio Tinto, Newcrest Mining, and Santos, along with other international miners, currently have interests in Indonesia.

According to AFP Indonesia also wants to ban the export of raw minerals by 2014 to stop foreigners exploiting the nation’s resources.

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