Thursday, 08 Mar 2012
Under new rules announced on the energy ministry's website, Indonesia will force foreign firms to sell down stakes in mines by the 10th year of production and increase domestic ownership to at least 51%.
The Indonesian Government recently issued Government Regulation No.24 of 2012 which amended Government Regulation No.23 of 2010 on the Implementation of Minerals and Coal Mining Activities (GR 24/2012). In brief Government regulation No. 24 of 2012 issued on 21 February 2012
1. Implements divestment requirements for foreign investors in Indonesian mining projects.
2. The prohibition on transfer of Indonesian mining licenses (IUPs) has been overturned (with limitations).
The significant change brought about by GR 24/2012 is a requirement for foreign investors in the Indonesian mining sector to divest a minimum of 51 per cent of the equity in the mining licence (IUP) holding entity by the tenth year of production, in accordance with a divestment schedule. This requirement applies to IUP licence holders with any level of foreign shareholding.
Five years after the commencement of production, a foreign IUP Holder is required to divest shares in accordance with the divestment schedule set out below so that at the end of the tenth year a minimum of 51 per cent of the shares in the PMA IUP holder are owned by an Indonesian Participant.
The following types of entity comprise an ‘Indonesian Participant’ for the purposes of GR 24/2012
1. The central government
2. The provincial, regency or municipal government
3. SOE or a Regional Owned Enterprise (ROE)
4. A private national business entity
The divestment shares are to be offered to entities in the order of priority listed above by way of auction.
Divestment schedule
The shareholding percentage of the foreign shareholder for each year after the fifth year of production must divested in accordance with the divestment schedule below:
1. 20% (of total) on the sixth year of production
2. 30% on the seventh year
3. 37% on the eighth year
4. 44% on the ninth year
5. 51% on the tenth year
Transfer of IUP
Prior to the issuance of GR24/2012, IUPs could not be transferred or assigned from one entity to another. GR24/2012 provides that an IUP may be transferred to another entity on the basis that the transferor holds a minimum of 51 per cent of the shares in the assignee.
Source - lexology.com
Showing posts with label foreign firm ownership. Show all posts
Showing posts with label foreign firm ownership. Show all posts
Thursday, March 8, 2012
Friday, December 2, 2011
From rags to riches at South Africa iron ore mine
Fri Dec 2, 2011
KATHU, South Africa Dec 2 (Reuters) - Life is about to get a lot better for people like Christopher Mocwane, a worker at one of the world's largest iron ore mines outside this dusty town in the middle of the Kalahari desert.
Thanks to an employee share ownership scheme, the 47-year-old, who earns 7,000 rand ($835) a month, is about to receive a 576,045-rand ($68,700) windfall.
"I'm going to buy myself a house. The one where I live now, I'll fix it and give it to my mother," he told Reuters, wiping the sweat off his forehead in the scorching heat. "She was very happy when I told her."
"My children are still small, but I will now be able to send them to school when they grow up," he added with a nervous smile.
Mocwane is one of 6,200 workers at Kumba Iron Ore due to benefit from the plan aimed at ensuring all its workers share the profits of the iron ore producer over the past five years.
A unit of global miner Anglo American, Kumba has already paid out 279 million rand in dividends to the same employees, an average of 55,000 rand per person over five years.
The lump sum to be paid out between Dec. 15 and 17 is linked to the share price on Nov. 17, and comes to around 345,000 rand per employee after taxes. Those who have not been with Kumba for the full five years will get less.
"I've tried to fix my house. We had a problem with water, and now we have water," said Mocwane, who has worked at the open-pit mine for 17 years, first as a cleaner and now driving trucks.
"For many years I didn't have a car, but I have one now. I can see a lot of difference in my life," he said.
A SUCCESS FOR EMPOWERMENT SCHEME
Kumba's "Envision" programme has become a poster child for South Africa's much-maligned Black Economic Empowerment scheme aimed at giving blacks a stake in the economy after apartheid was dismantled in 1994.
Under the scheme, companies are required to meet quotas on black ownership, employment and procurement. Many have invested millions to build houses, hospitals and schools, but unions say Kumba's solution is unique.
"Every benefit the company is earning, (the workers) are part of it ... and it's not just a one-off," said Tebogo Chakapedi, a shopsteward at the National Union of Mineworkers.
"We would like that at a national level all companies adapt this," Chakapedi added.
Kumba's scheme was established when the iron ore assets of then Kumba Resources were unbundled in the Sishen Iron Ore Company (SIOC) in 2006.
Luckily for the employees, the company's share price has since soared thanks to rising prices of iron ore -- a core ingredient in steel -- from 120 rand in 2006 when the scheme was launched to 502 rand on Friday.
Many empowerment schemes have been criticised as only benefiting a small and politically-connected elite in a country where millions of black South Africans still live in poverty and more than a quarter of the workforce is jobless.
Critics, including some in South Africa's ruling African National Congress calling for the nationalisation of mines, also contend that mining houses have done little for the communities that sit atop the minerals.
This has sparked a drive by unions and the government to push for more broad-based deals like Kumba's.
GOOD BUSINESS SENSE
Kumba chief executive Chris Griffith said Envision made business sense as well.
"We haven't had a strike in years. Employees are thinking all the time about how to continue to deliver what we are expected to deliver ... that also brings a lot of comfort for investors," he said.
Kumba today boasts one of the lowest staff turnover rates in the industry at around 3 percent and has launched another 5-year scheme bringing more dividends and another lump sum in 2016 as an incentive to stay on instead of cashing in and leaving.
Aware of the potential negative effects of sudden windfalls, the company has organised workshops, industrial theatre performances and distributed comics over the past year to teach workers about how to pay off debt and invest in housing.
They were also taught how to pay taxes -- a new experience for some given their incomes range between 5,000 and 20,000 rand a month, excluding benefits.
The arid Northern Cape province all around Kathu is sparsely populated and impoverished, a sprawling rural area where carts are still drawn by donkeys.
But there is lots of building activity in Kathu and new businesses like hair salons and car washes are springing up, partially supported through programmes organised by Kumba.
In a country with one of the world's highest crime rates, there are concerns that the next pay day will be a magnet for criminals. Kumba said it was working with the local police to make sure people would not be targeted by thieves.
"I'm afraid (you) will see people knocking on your door saying 'oh, I'm selling this...', maybe coming to rob us," said Patricia Andries, a health and safety officer at the mine.
For now workers are just counting the days.
"It's like a kid waiting for Christmas ... my wife can't wait," said Ian van den Heever, a boiler maker at the mine.
(sourced Reuters)
KATHU, South Africa Dec 2 (Reuters) - Life is about to get a lot better for people like Christopher Mocwane, a worker at one of the world's largest iron ore mines outside this dusty town in the middle of the Kalahari desert.
Thanks to an employee share ownership scheme, the 47-year-old, who earns 7,000 rand ($835) a month, is about to receive a 576,045-rand ($68,700) windfall.
"I'm going to buy myself a house. The one where I live now, I'll fix it and give it to my mother," he told Reuters, wiping the sweat off his forehead in the scorching heat. "She was very happy when I told her."
"My children are still small, but I will now be able to send them to school when they grow up," he added with a nervous smile.
Mocwane is one of 6,200 workers at Kumba Iron Ore due to benefit from the plan aimed at ensuring all its workers share the profits of the iron ore producer over the past five years.
A unit of global miner Anglo American, Kumba has already paid out 279 million rand in dividends to the same employees, an average of 55,000 rand per person over five years.
The lump sum to be paid out between Dec. 15 and 17 is linked to the share price on Nov. 17, and comes to around 345,000 rand per employee after taxes. Those who have not been with Kumba for the full five years will get less.
"I've tried to fix my house. We had a problem with water, and now we have water," said Mocwane, who has worked at the open-pit mine for 17 years, first as a cleaner and now driving trucks.
"For many years I didn't have a car, but I have one now. I can see a lot of difference in my life," he said.
A SUCCESS FOR EMPOWERMENT SCHEME
Kumba's "Envision" programme has become a poster child for South Africa's much-maligned Black Economic Empowerment scheme aimed at giving blacks a stake in the economy after apartheid was dismantled in 1994.
Under the scheme, companies are required to meet quotas on black ownership, employment and procurement. Many have invested millions to build houses, hospitals and schools, but unions say Kumba's solution is unique.
"Every benefit the company is earning, (the workers) are part of it ... and it's not just a one-off," said Tebogo Chakapedi, a shopsteward at the National Union of Mineworkers.
"We would like that at a national level all companies adapt this," Chakapedi added.
Kumba's scheme was established when the iron ore assets of then Kumba Resources were unbundled in the Sishen Iron Ore Company (SIOC) in 2006.
Luckily for the employees, the company's share price has since soared thanks to rising prices of iron ore -- a core ingredient in steel -- from 120 rand in 2006 when the scheme was launched to 502 rand on Friday.
Many empowerment schemes have been criticised as only benefiting a small and politically-connected elite in a country where millions of black South Africans still live in poverty and more than a quarter of the workforce is jobless.
Critics, including some in South Africa's ruling African National Congress calling for the nationalisation of mines, also contend that mining houses have done little for the communities that sit atop the minerals.
This has sparked a drive by unions and the government to push for more broad-based deals like Kumba's.
GOOD BUSINESS SENSE
Kumba chief executive Chris Griffith said Envision made business sense as well.
"We haven't had a strike in years. Employees are thinking all the time about how to continue to deliver what we are expected to deliver ... that also brings a lot of comfort for investors," he said.
Kumba today boasts one of the lowest staff turnover rates in the industry at around 3 percent and has launched another 5-year scheme bringing more dividends and another lump sum in 2016 as an incentive to stay on instead of cashing in and leaving.
Aware of the potential negative effects of sudden windfalls, the company has organised workshops, industrial theatre performances and distributed comics over the past year to teach workers about how to pay off debt and invest in housing.
They were also taught how to pay taxes -- a new experience for some given their incomes range between 5,000 and 20,000 rand a month, excluding benefits.
The arid Northern Cape province all around Kathu is sparsely populated and impoverished, a sprawling rural area where carts are still drawn by donkeys.
But there is lots of building activity in Kathu and new businesses like hair salons and car washes are springing up, partially supported through programmes organised by Kumba.
In a country with one of the world's highest crime rates, there are concerns that the next pay day will be a magnet for criminals. Kumba said it was working with the local police to make sure people would not be targeted by thieves.
"I'm afraid (you) will see people knocking on your door saying 'oh, I'm selling this...', maybe coming to rob us," said Patricia Andries, a health and safety officer at the mine.
For now workers are just counting the days.
"It's like a kid waiting for Christmas ... my wife can't wait," said Ian van den Heever, a boiler maker at the mine.
(sourced Reuters)
Friday, August 19, 2011
Zimbabwe gives foreign firms 14-day empowerment
Fri Aug 19, 2011
By Nelson Banya, Reuters
HARARE (Reuters) - Zimbabwe's government has given foreign firms, including mines and banks, a 14-day ultimatum to submit "acceptable" plans on how they propose to transfer majority stakes to local owners or risk losing permits, state media reported on Friday.
The firms include platinum miners Zimplats, which is majority owned by Impala Platinum (Implats), and Mimosa, Implats's 50-50 joint venture with Aquarius Platinum. Others include Rio Tinto's Murowa diamond mine, British American Tobacco and local units of British banks, Standard Chartered and Barclays.
The companies risk losing their operating licences if they do not submit the ownership plans, the state-controlled Herald newspaper reported.
Indigenisation and Empowerment Minister Saviour Kasukuwere wrote to the firms on July 28, informing them they had failed to provide acceptable details of how they proposed to transfer 51 percent shareholdings to local people within the five years stipulated by the law, the newspaper said.
In March, Kasukuwere gave mining firms 45 days to file empowerment plans and imposed a September 30 deadline for the transfer of ownership.
The deadline to submit empowerment plans has since passed.
Last month, Kasukuwere told a conference the government had rejected 175 empowerment plans from mines which mostly proposed selling 25 percent shareholdings, with 26 percent being made up of credits awarded for social investments made in infrastructure, health and education facilities.
Zimbabwe's coalition government set up by President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai two years ago following disputed elections is divided over the implementation of the empowerment law, enacted in 2008 and championed by the president's ZANU-PF party.
Tsvangirai has warned that the law threatens Zimbabwe's economic recovery, which started after the formation of the power-sharing government in 2009, following a decade in which GDP shrank by as much as 50 percent, according to official figures.
By Nelson Banya, Reuters
HARARE (Reuters) - Zimbabwe's government has given foreign firms, including mines and banks, a 14-day ultimatum to submit "acceptable" plans on how they propose to transfer majority stakes to local owners or risk losing permits, state media reported on Friday.
The firms include platinum miners Zimplats, which is majority owned by Impala Platinum (Implats), and Mimosa, Implats's 50-50 joint venture with Aquarius Platinum. Others include Rio Tinto's Murowa diamond mine, British American Tobacco and local units of British banks, Standard Chartered and Barclays.
The companies risk losing their operating licences if they do not submit the ownership plans, the state-controlled Herald newspaper reported.
Indigenisation and Empowerment Minister Saviour Kasukuwere wrote to the firms on July 28, informing them they had failed to provide acceptable details of how they proposed to transfer 51 percent shareholdings to local people within the five years stipulated by the law, the newspaper said.
In March, Kasukuwere gave mining firms 45 days to file empowerment plans and imposed a September 30 deadline for the transfer of ownership.
The deadline to submit empowerment plans has since passed.
Last month, Kasukuwere told a conference the government had rejected 175 empowerment plans from mines which mostly proposed selling 25 percent shareholdings, with 26 percent being made up of credits awarded for social investments made in infrastructure, health and education facilities.
Zimbabwe's coalition government set up by President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai two years ago following disputed elections is divided over the implementation of the empowerment law, enacted in 2008 and championed by the president's ZANU-PF party.
Tsvangirai has warned that the law threatens Zimbabwe's economic recovery, which started after the formation of the power-sharing government in 2009, following a decade in which GDP shrank by as much as 50 percent, according to official figures.
Thursday, March 10, 2011
Zimbabwe PM says not set on foreign firm ownership
Thu Mar 10, 2011 9:54am GMT
HARARE, March 10 (Reuters) - Zimbabwe's cabinet has not yet decided minimum ownership thresholds for foreign companies that are ultimately supposed to surrender a 51 percent stake to local blacks, the prime minister said on Thursday.
Morgan Tsvangirai also told a meeting of business leaders the government had not yet drawn up detailed plans on a proposed sovereign wealth fund to buy majority stakes in foreign mining firms. (Reporting by by MacDonald Dzirutwe; Editing by Jon Herskovitz,sourced:Thomson Reuters)
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