Indonesian President Prabowo Subianto has directed that the state should receive at least 70 per cent of proceeds from all mining permits, adding that the government should take controlling stakes in mining companies where necessary.
Prabowo gave the directive on Saturday while addressing members of Muhammadiyah, one of Indonesia’s largest Islamic organisations, during its 114th anniversary celebrations in Palu, Central Sulawesi.
“From now on, all mining permits, at least 70 per cent must benefit the state. If necessary, the shares should be state-controlled,” the President said.
A statement from the presidential palace clarified that the 70 per cent target referred to proceeds from the management of mining permits.
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Prabowo maintained that Indonesia remained open to investment in the mining sector but insisted that the bulk of the profits should go to its citizens.
“The profits must predominantly go to the Indonesian people,” the President stressed.
Earlier this year, local media reported that government officials had considered introducing a gross-split scheme for the mineral and coal sectors, under which the government would receive 70 per cent of output while mining operators would retain 30 per cent.
However, Energy Minister Bahlil Lahadalia said in June that the proposal had been dropped following consultations with Prabowo.
Reuters
