Asiamet Resources has provisionally agreed to amendments with the Indonesian government to the contract of work (CoW) covering the KSK Copper Project in Kalimantan, Indonesia. Asiamet was formerly known as Kalimantan Gold Corporation.
After a period of negotiation Asiamet has signed a non-binding memorandum of understanding (MOU) with the Government of the Republic of Indonesia and items contained within the MOU will be incorporated as an amendment to the CoW. Many of the amendments align the contract with Indonesian laws.
CoWs typically provide security of tenure to an exploration company for 30 years or more and Asiamet has clarified with the government that its CoW remains in the fifth year of the exploration stage, and as such has a total of 30 years remaining for exploration, development and operations.
The MOU sets out the possibility that after 30 years of operation under the CoW the company would be entitled to apply to continue operations by applying for a special mining business licence for two further periods, both 10 years in length.
Under the agreed MOU terms the corporate income tax rate will continue to be 30% as prescribed in the CoW but royalties will now follow the provisions of the prevailing law. Royalty rates now applicable to gold and copper under the prevailing laws are 3.75% and 4% respectively. Asiamet says these rates compare well with most mining jurisdictions globally.
The CoW currently has a provision that requires Asiamet to work towards, and assist, the government in supporting the policy of establishing metals processing facilities in Indonesia in relation to smelting and refining. The company is now under obligation to process and refine the mineral ores domestically in line with the current provisions of the rules of law in Indonesia.
Asiamet’s CEO Tony Manini says, “We are pleased with the outcome of negotiations to date as the amended terms envisaged under this MOU consolidate Asiamet’s position in the KSK CoW for the long term and provides a secure platform upon which the company can deliver value for all its stakeholders.
“The potential amendments outlined in the MOU are aligned with the company’s strategy of partnering with reputable Indonesian investors to develop its projects and support the Government’s endeavours to build its economy.”