Mining sector promises more investment in 1999<\/p>\n
JAKARTA (JP): Foreign investment in the mining sector should
\ncontinue flowing in 1999 despite the prevailing uncertainties on
\nboth the economic and political fronts, Minister of Mines and
\nEnergy Kuntoro Mangkusubroto said on Monday.<\/p>\n
Speaking at a year-end press conference, Kuntoro revealed that
\nthe government had received 16 applications for coal mining and
\n13 applications for mining other minerals for the eighth
\ngeneration of the mineral contracts of work (COWs), bringing the
\ntotal to 29.<\/p>\n
"This is not too bad for a situation like this. This indicates
\nthat investing in our mining sector remains attractive," Kuntoro
\nsaid, adding that the government was currently drafting the
\neighth generation mineral COWs.<\/p>\n
He gave no details about the applicants.<\/p>\n
The government must hold discussions with the House of
\nRepresentatives before awarding mining contracts.<\/p>\n
This year the government received and approved 72 applications
\nfor seventh generation mineral COWs, compared to 50 applications
\nin 1997 and 239 applications in 1996.<\/p>\n
Of the 72 approved applications, 38 companies had signed the
\ncontracts, 10 withdrew their applications, 17 lost their
\nprincipal licenses and seven more were still considering signing
\nthe contracts.<\/p>\n
The government awarded 65 sixth generation COWs in 1997, seven
\nfifth generation COWs between 1991 and 1994, and 95 fourth
\ngeneration COWs between 1985 and 1990.<\/p>\n
Director General of Mining Rozik Boedioro Soetjipto said that
\neven if the government immediately awarded eighth generation COWs
\nto the applicants, they would not bring a significant amount of
\ninvestment to the industry in 1999 because the companies would
\nonly do general surveys during the first year.<\/p>\n
Contracts require mining companies to carry out their
\nactivities in stages, beginning with a general survey (one year),
\nthen exploration (three years), a feasibility study (one year),
\nconstruction (three years) and production (30 years).<\/p>\n
Rozik said that significant investments were expected to come
\nfrom holders of fourth, fifth and sixth generation COWs.<\/p>\n
Some holders of seventh generation COWs had just started their
\nfield activities.<\/p>\n
Kuntoro also revealed that Indonesia remained the top
\ninvestment destination in Southeast Asia for mineral exploration
\nactivities.<\/p>\n
A study by the Metals Economics Group showed that in 1998
\nIndonesia absorbed US$136 million, or 75 percent of all funds for
\nmineral exploration activities in the region.<\/p>\n
"Although 1998 was a bleak year for all of us, the investment
\nactivities in the mining sector were heartening. And for 1999, we
\nexpect investment in the mining sector will not disappoint,"
\nKuntoro said.<\/p>\n
Rozik projected that total investment in mining for 1998 would
\nreach $2 billion.<\/p>\n
"For next year, it will be hard to achieve that level. But I
\nam confident that significant investments in the mining sector
\nwill remain," he said.<\/p>\n
He said new investments in 1999 would be affected by the
\ngovernment's policy consistency and its commitment to honor the
\nexisting contracts.<\/p>\n
In the oil and gas sector, Minister Kuntoro said it would be a
\ndifficult year for Indonesia following the drastic fall of oil
\nprices in the world market.<\/p>\n
Kuntoro predicted that crude oil prices would remain low in
\n1999, ranging from $10 to $12 per barrel.<\/p>\n
"Unless something takes place early next year, prices will be
\nrange-bound between $10 and $12 a barrel," Kuntoro said.<\/p>\n
In 1998, the government signed 22 new oil contracts, of which
\n15 were production sharing contracts, four were joint operating
\nbodies and three were technical assistant contracts.<\/p>\n
This year, Indonesia also witnessed the inauguration of the
\ncountry's longest gas pipeline, from South Sumatra to Central
\nSumatra.<\/p>\n
The 536-kilometer pipeline transmits natural gas from the Gulf
\nIndonesia Resources' gas fields in Gersik, Musi Banyuasin, South
\nSumatra, to the oil fields of PT Caltex Pacific Indonesia in
\nDuri, Riau, where the gas is used to replace crude oil to pump
\ncrude oil wells.<\/p>\n
Kuntoro said the government plans to build another 328-
\nkilometer pipeline from Duri to Batam island and then to
\nSingapore.<\/p>\n
The minister also said that the government was currently
\nworking on some technical issues pertaining to the contracts for
\na 640-kilometer subsea gas pipeline from the western part of the
\nNatuna Islands to Singapore.<\/p>\n
"We hope we can settle all the problems by mid-January,"
\nKuntoro said.<\/p>\n
Discussing electricity, Kuntoro said the government would
\nmaintain the current electricity rates for consumers, except for
\nupper-class households, until the end of March.<\/p>\n
"I can guarantee that the electricity tariffs will remain the
\nsame until March. After that, we do not know yet. It will depend
\nvery much on the nature of the 1999\/2000 budget," he said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mining-sector-promises-more-investment-in-1999-1447893297",
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