The amendments, enacted by the Indonesian Ministry of Mining and Energy last month, require foreign-owned companies which hold mining permits in Indonesia to begin divesting stakes to Indonesian entities once the mine is in its sixth year of production.

A minimum level of local ownership will be related to how many years a specific mining licence has been in commercial production.

A mine in its sixth year of production will require a divestment of 20%, while a mine in its 10th year of production will be obligated to a 51% divestment.

Coal explorer Cokal is just one of the many Australian Securities Exchange-listed companies developing projects in Indonesia.

Cokal said it had four development licences in Indonesia, holding a 75% stake in its AAM and AAK coal licences.

It said the licences would be affected by the new divestment requirements by the seventh year of production.

Cokal’s other two mining licences comprise the BBM and BBP projects, both 60%-owned by the company.

It said the two developments would not be affected until year nine of commercial production.

Despite the obvious downsides to the amended legislation, Cokal said it would not flee Indonesia.

“The company intends to be proactive in developing a corporate strategy that captures the best outcome for shareholders while meeting the legal requirements of the government of Indonesia,” it said.

“The company remains confident in the potential of Central Kalimantan to become a bottom cost quartile metallurgical coal province and will continue to push ahead with its goal of becoming a significant producer in the region.”

Meanwhile, Australia-based Indonesia explorer Jatenergy said it was closely monitoring information regarding the amendment as it became available to determine what action, if any, would be appropriate.

Jatenergy said its East Kalimantan coal operations, which comprise the Jongkang I and II mines and the Atan Bara development, were unlikely to be impacted by the legislation.

Jatenergy chief executive officer Phil Hodgson said he didn’t believe the amendments would have adverse effects for the company.

“We also have the rights to coal and renewable crude oil assets in Indonesia and Australia, held under various ownership and partnership structures,” he said.

“This provides diversification of our revenue streams and development potential so that we can effectively manage regulatory risks.”