Australian firms keep faith in Indonesia: Minister

Australian firms keep faith in Indonesia: Minister

JAKARTA (JP): Australian businesses, particularly in the
mining and energy sector, are maintaining their presence in
crisis-plagued Indonesia and showing a strong commitment to their
ventures, a visiting Australian minister said on Monday.

Minister for Industry, Science and Resources Nick Minchin said
the companies considered Indonesia's enormous business potential
based on its huge population, immense natural resources and
vibrant, energetic and friendly people.

"Major Australian companies have maintained their commitment
to Indonesia despite the crisis and are to be congratulated for
hanging in here in the face of economic difficulties," Minchin
said at a business luncheon organized by the Indonesia-Australia
Business Council.

Minchin said Australian investors maintained their strong
presence in the mineral and energy sector because it was one of
the few which managed to escape relatively unscathed from the
crisis.

He said the rupiah's sharp depreciation against the U.S.
dollar since mid-1997 enhanced the international competitiveness
of Indonesian coal exports. It also helped boost profitability of
Australian coal mining companies in Indonesia.

"Suppliers from other countries are finding it more difficult
to compete in the Asian markets for steaming coal -- providing
further market opportunities for Australian and Indonesian coal
suppliers."

Major Australian mining companies operating in Indonesia
include the country's largest coal miner PT Kaltim Prima Coal in
East Kalimantan, equally owned by Anglo-Australian mining company
British Petroleum and Rio Tinto, and tin miner PT Koba Tin in
South Sumatra, a joint venture between Australia's Kajuara Mining
Corp. Pty. Ltd. (75 percent) and publicly-listed state mining
company PT Aneka Tambang (25 percent).

Other major Australian mining firms present in the country are
Broken Hill Pty. Co. Ltd., Aurora Gold, Kalimantan Gold, Ocean
Resources, Straits Resources and North Mining. Their explorations
include gold, diamonds and other minerals.

Several Australian mining goods and service providers are also
represented.

Minchin said Australian investment in mining remained strong
last year despite the crisis, with 11 Australian companies
awarded contracts of work (COW) early in 1998.

"(The Indonesian government's) continuing moves to privatize
state-owned mining companies hold out opportunities for a further
expansion of Australian businessmen in Indonesia."

He said Australian investors rated Indonesia as a country with
excellent mineral prospects and the COW scheme applied by the
government in the mining sector provided investment security.

Minchin noted Indonesia could do more to offer competitive
taxation and resource access regimes to attract global investors.

"In the age of globalization, capital flows are very fast and
free ... It is not enough for Indonesia to be highly prospective
in minerals and energy products. Indonesia's taxation and
resources access regimes must be as good as, and ideally better
than, the many countries competing for the investment," Minchin
said. (jsk)