JOHANNESBURG (miningweekly.com) – London-listed Asiamet has concluded long-running negotiations with the Indonesia government to amend the contract of work (CoW) of its operating subsidiary, Kalimantan Surya Kencana (KSK), a development which CEO Peter Bird describes as a “major derisking milestone” as the Beruang Kanan Main (BKM) copper project heads into the financing and development stage.
The company has secured an initial 30-year contract term from the start of production, with the option to extend this by another two ten-year periods under the current mining law.
As KSK is regarded as a foreign investment company, Indonesia’s foreign ownership laws mandate that 51% of its foreign-owned shares be divested at a fair market value after ten years of operation. The divestment could take the form of a partial listing on the Indonesian Stock Exchange or the introduction of local partners. Asiamet said on Monday that it favoured partnering with Indonesian companies at development and operational stage.
The company reported that the fiscal framework agreed to was competitive on a global scale, with corporate income tax set at a rate of 25%, net smelter return royalties for copper at 4%, gold at 3.75% and silver at 3.25%. The 2016 preliminary economic assessment of the BKM project already used these rates as a basis for the project evaluation.
Asiamet has further committed to work with Indonesia in support of the policy of establishing metals processing facilities in the country and to mostly make use of local labour, products and mining services companies.
“The company is firmly of the view that the KSK CoW has the potential to host a district scale pipeline of copper/gold and polymetallic mineral prospects, which are yet to be fully understood or appreciated,” said Bird.
Measured resources at BKM, as announced in June 2017, comprise 20.5-million tonnes, at 0.7% copper, containing 325.7-million pounds (or 147 000 t) of copper. Indicated resources are estimated at 28.7-million tonnes at 0.6% copper, containing 385.6-million pounds of copper.