Indonesia says may need to adjust mining contracts

JAKARTA, Dec 22 (Reuters) - Indonesia will evaluate existing mining contracts to see whether they need adjusting particularly on royalties and the size of mining areas after the passage of a new mining law, the energy and mines minister said on Monday.

Indonesia's parliament passed a new law on coal and mining last week that promises more certainty for investors although it has raised concerns that it may deter major new foreign investment. [ID:nJAK386565]

Minister Purnomo Yusgiantoro said existing contract of works would not be changed into newly introduced mining permits but the government would be seeking to maximise revenue for the state including the possibility of raising royalties.

Officials have previously said that existing Indonesian mining contracts would be upheld.

"For companies that have given maximum revenue to the state they won't need to change, but some may have to do it," he said, without elaborating.

"We will also talk to companies about increasing royalties."

The minister said the government would also review mining concessions held by existing mining contractors.

"There are many huge mining concessions. We now ask mining firms to submit their plans for those areas," Yusgiantoro said.

The new law will limit mining areas for exploration and production.