Mining Law
Implementation
Regulations Require
Increased Foreign
Divestment

The Indonesian government has released implementing regulations for the Indonesian mining law adopted in 2009 which markedly increase the requirement for foreign divestment of Indonesian mining companies.

The implementing regulations require foreign shareholders of Indonesian mining companies that hold a mining license to divest shares in stages each year beginning on the sixth year after the commencement of commercial production with a divestiture requirement of at least 51% by the tenth year after commencement of commercial operation. The implementing regulations require a tender to be made for the divestment with shares offered first to the central government. Even with Indonesia’s robust increase in foreign investment and the popularity of the Indonesian mining industry among Hong Kong investors, it remains unclear whether this new divesture requirement will curb the appetite of Hong Kong investors.


A miner in Indonesia’s Central Sulawesi province

 

- Akin Gump Hauer Strauss & Feld

Jurisdictions