Mining sector dives amid economic woes<\/p>\n
JAKARTA (JP): New foreign investment in the country's mining
\nsector has plummeted this year, but activities of existing
\ncontract holders are expected to significantly increase over the
\nnext five years, Minister of Mines and Energy Kuntoro
\nMangkusubroto has said.<\/p>\n
Speaking at a hearing with the House of Representatives's
\nCommission V on Tuesday, Kuntoro said the ministry received only
\nsix applications for mineral contracts of work (COW) from foreign
\ninvestors as of last month, compared with 50 applications
\nthroughout last year and 239 applications in 1996.<\/p>\n
He attributed the downturn to the drop in prices of mineral
\nproducts, including gold, on the international market, the global
\nmonetary crisis and low investor confidence in the country's
\npolitical and economic outlook.<\/p>\n
A downward trend was also registered in applications for
\nmineral contracts from domestic investors and for coal contracts
\nfrom domestic and foreign investor.<\/p>\n
The ministry received 219 applications for mineral contracts
\nfrom domestic investors as of last month, as against 414
\napplications throughout last year and 380 applications in 1996.<\/p>\n
It received 11 applications for coal contracts from local and
\nforeign investors as of last month, compared to 19 applications
\nlast year and 70 applications in 1996.<\/p>\n
However, in the next five years the country would register an
\nincrease in the activities of mining companies already awarded
\ncontracts, Kuntoro told the commission which oversees mines and
\nenergy, industry and trade, investment, manpower, environment and
\ncooperatives.<\/p>\n
The government awarded 95 fourth generation mineral COWs
\nbetween 1985 and 1990, seven fifth generation mineral COWs
\nbetween 1991 and 1994, 65 sixth generation mineral COWs last year
\nand 38 seventh generation mineral COWs early this year. Most of
\nthe contracts went to foreign mining companies.<\/p>\n
Contracts require mining companies to carry out their
\nactivities in stages beginning with a general survey (one year),
\nthen exploration (three years), feasibility study (one year),
\nconstruction (three years) and production (30 years).<\/p>\n
Kuntoro said holders of the seventh generation COWs would soon
\nstart field activities.<\/p>\n
About 101 holders of the previous generation COWs are
\ncurrently conducting a general survey, and seven companies have
\nembarked on exploration.<\/p>\n
Sixteen companies are already in the feasibility study stage,
\nfive companies are in the construction stage and 12 companies are
\nin production.<\/p>\n
He added the government was drafting the eighth generation
\nmineral COWs. Different from previous generation COWs, the terms
\nwill specify obligations of contractors in regard to community
\ndevelopment. (jsk)<\/p>",
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