Indonesian president orders greater share of mining benefits for the state

JAKARTA, Nov 14 (Reuters) – Indonesian President Prabowo Subianto said on Saturday that the state should secure a greater share of benefits from all mining permits and, if necessary, hold controlling stakes in mining assets.

• “From now on, all mining permits, at least 70% must benefit the state. If necessary, the shares should be state-controlled,” he said in a speech to members of one of Indonesia’s largest Islamic groups, Muhammadiyah

• A statement from the presidential palace said the 70% stipulated by the president referred to the proceeds from management of mining permits

• Prabowo added in his speech that Indonesia was open to investors in the mining sector but “the profits must predominantly go to the Indonesian people”

• Earlier this year, several local media outlets reported, citing Deputy Energy Minister Yuliot Tanjung, that officials had discussed having the mineral and coal sector adopt a gross-split scheme under which 70% of output would go to the government and 30% to the mine operator

• However, Energy Minister Bahlil Lahadalia later said in June that the proposal had been dropped following consultations with Prabowo

(Reporting by Stefanno Sulaiman)