Investment in the mining sector could suffer as the implementing regulations for the Mining Law passed in December are now likely to be delayed until March due to “technical problems,” a legislator said on Monday.
“The government has confirmed that the new regulations on mineral and coal resources will be completed by the end of March,” said Teukeu Riefky Harsya, chairman of the House of Representatives’ energy commission. “We had hoped they would be ready by the end of the year.”
He said various technical problems were behind the delay. These included the coordination of the new regulations with other legislation and the need to hold further hearings with industry players.
Teukeu said the delay could stall investment in the mining sector as the Mining Law could not be implemented until the regulations were issued.
Mining industry players were not pleased by the delay.
“We hope that the government will finalize the regulations as soon as possible,” said Priyo Pribadi Soemarno, the executive director of the Indonesian Mining Association. “If they keep being delayed, this could disrupt investment in the mining sector.”
Priyo said the delay would hold up the issuing of mining concessions by local governments because they could not proceed without the regulations.
“There is as yet no interdepartmental or local government synchronization,” he said, referring to overlap between the Mining Law and the environmental and forestry laws.
“Under the Mining Law, the power rests with the central government. If the regulations aren’t finished, then the government should issue interim government regulations to fill the vacuum.”
Four sets of implementing regulations are currently being drafted by the House. These rules cover the granting of mining concessions, the operation of mining firms, mine management, and supervision and post-mining environmental rehabilitation.
Industry representatives this month said that they were confused by recently issued regulations restricting the work contractors were allowed to perform for mining concessionaires. They added that the regulations failed to clearly explain what contractors were permitted to do and what they were barred from.
They said Article 10 of the Sept. 30 regulations, which provides that “the holder of a mining concession or special mining concession must itself perform mining, processing and refining work,” was particularly problematic, as much of this work was currently being carried out by contractors.