Jakarta-The Government requires that mineral and coal mining companies to divest foreign ownership or disposal of shares to participants Indonesia by 51 percent.

Divestment obligations stipulated in Government Regulation (PP) 24 Year 2012 regarding Amendment to Regulation No.23 of 2010 on the implementation of mineral and coal mining business which obtained a copy here on Wednesday.

The new regulations signed by President Susilo Bambang Yudhoyono on February 21, 2012 the revised Regulation No.23 of 2010 which only requires divestiture of 20 percent.

According to the new provisions, foreign companies mining permit holders after five years of production required to divest its stake in stages, so that in the tenth year of its shares owned at least 51 percent of participants Indonesia.

 Divesting stages is 20 percent of all shares in the sixth year of production, then 30 percent in the seventh year, 37 percent in its eighth year, 44 percent in the ninth year, and 51 percent year-on-10.

Indonesia is comprised of participants from government, provincial or local government district / city, state, enterprises, or private entities nationwide.

There will also be mentioned that if the divestiture is not reached, then the stock offering conducted in the following year.

In addition, article 98 in the regulation that states, in the event of an increase in the amount of capital the company, the participant Indonesia shares should not be diluted to less than the number of shares corresponding stages of divesting obligations.

Foreign mining that violates the provisions of divestitures will be subject to administrative sanctions ranging from a written warning, suspension, to revocation of license.

That rule applies from the promulgation date of February 21, 2012 and not retroactive. The rule also applies to all contracts which have the extension.