Indonesia seeks mining revenues from redrafting contracts

JAKARTA Jun 7 (Reuters) - Indonesia is seeking to boost state revenues from mining royalties and gas sales by renegotiating contracts, the energy and mines ministry said on Tuesday.

Darwin Zahedy Saleh, Energy and Mines Minister, said this will include renegotiating royalties paid by miners to the government, but gave no details or timeframe.

"We want a bigger portion for our state revenue," Saleh told reporters.

The comments are likely to increase uncertainty for foreign investors in the resources sector in Indonesia, which is attracting increased investor attention this year amid high commodity prices after years of sluggish interest.

Some politicians have in the past often taken a nationalist stance over resource exploitation in the country, where miners also face instititional corruption and local interests pushing for greater ownership or revenues from resource assets.

Asked how big an increase in royalty was expected by the government, Saleh said it would depend on each contract.

"We, of course, will maintain the sanctity of contracts," he said.

It was not clear if the renegotiations would be part of regulations stemming from a 2009 mining law, which said wholly foreign-owned mining projects should gradually sell a 20 percent stake to Indonesian investors. [ID:nL3E7GA086]

Indonesia has issued several mining regulations under the law, including rules to obtain mining permits, a requirement to process minerals domestically and to sell all mining products based on a government monthly benchmark price.

Evita Legowo, a director general for oil and gas at the ministry, said contract renegotiation in the energy sector would focus on renegotiation of gas prices. She said that the government would renegotiate the price of gas exported from the Tangguh field in Papua to China. (Reporting by Alfian; Editing by Neil Chatterjee)