Indonesia's miners are set for strong growth in 1990s
Indonesia's miners are set for strong growth in 1990s
SYDNEY (Reuter): Indonesia's mining sector is poised for
strong growth in the 1990s with five new contracts to be signed
this year and reports of another 25 in the pipeline, an ASEAN
Mining conference was told.
The Indonesian Mines Department this year lifted a seven-year
moratorium on granting contracts of work (CoWs), the preferred
system for foreign investors to invest in Indonesia, Mike
Andrews, exploration director at Meekatharra Minerals Indonesia,
told the conference.
"The government is now actively seeking exploration and
encouraging major mining companies to take up CoWs," he said.
"It is a different place to what it was five years ago ... and
to attract the major mining houses, Indonesia is systematically
exploring the bigger areas of the country."
Large Indonesian companies are playing a greater role in
mining as a form of diversification than in 1986/87 when a record
103 contracts of work were granted in the nation's fourth round
of contracts.
"Indonesian manufacturing and timber groups are applying for
ground and then seeking foreign mining houses to provide funding
and operate," Andrews said.
A contract of work is granted to a joint foreign/local company
and allows up to 10 years for the exploration and feasibility
stages and 30 years to operate the mine.
Andrews said the area of land expected to be licensed in the
fifth generation of contracts of work would at least equal if not
exceed the area granted in 1986/87.
Aurora Gold Ltd's exploration manager Sandy Moyle said the
amount spent on exploration in Indonesia rose sharply in the
second half of 1993 following the uptrend in world gold prices.
Indonesia currently produces 13 percent of the Pacific Rim's
annual output of 370 tons of gold. It has produced 2,500 ton of
gold, 20 million tons of copper and 8,000 tons of silver to date.
"You are starting to see interest from the major and juniors
from Canada, the U.S., and Australia," said Moyle.
Much of the attraction is due to the fact that Indonesia is
still relatively unexplored with limited previous coverage by
modern exploration techniques used elsewhere, he said.
"In 1994, we have seen some joint ventures and far more money
is being spent on the ground," he added.
Managing director Malcolm Stevens of Carrie Pacific Holdings
Ltd, which has prospects in West Kalimantan, tipped Indonesia as
the best exploration nation in ASEAN.
"The country's mining industry has probably developed at a
slower pace than its business sectors, but the rate of mining
development is currently increasing and is expected to expand
even further during the next few years," he said.