Mining industry tangled in red tape<\/p>\n
Indonesia could become a world-class mining country but new
\ninvestors are steering clear because of legal uncertainties and
\nred tape, according to an annual industry survey obtained on
\nWednesday.<\/p>\n
"Investment spending on exploration and new mines has now been
\nvery low for several years," said the report by accounting firm
\nPriceWaterhouseCoopers.<\/p>\n
"This investment activity will not return to previous levels
\nuntil certainty over long term investment conditions is restored.<\/p>\n
"The long lead time and success rate from exploration to
\ndevelopment means that there will not be significant mine
\ndevelopment in Indonesia for several years."<\/p>\n
The government's revenue from the sector amounted to US$919
\nmillion last year and Indonesia could become a world-class mining
\ncountry if six problems are tackled, said PwC mining partner Marc
\nUpcroft in a statement.<\/p>\n
He said these include improving the competitiveness of the
\ntaxation and royalty system; resolving conflicts between work
\ncontracts and the forestry law; and restoring long term certainty
\nin the work contract system.<\/p>\n
Authorities should also minimize the potential for "over-
\nregulation" in the proposed draft mining law and draft law on
\nmanagement of natural resources, act against illegal mining and
\nensure fairness in divestment of foreign interests, he said.<\/p>\n
Last year exploration companies rated Indonesia poorly as a
\nplace to develop mines despite good mineral prospects, the report
\nsaid.<\/p>\n
"These are not promising signs for the mining industry."
\nEarlier this year Anglo-Australian giant Rio Tinto and British-
\nAmerican energy firm BP, joint owners of a huge coal mine on
\nBorneo island, sold out their entire interest to a local firm.
\nThe decision followed years of legal wrangling about the
\ndivestment of a 51 percent stake to local investors. -- AFP<\/p>",
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