Mining firms to resume investment

Moch. N. Kurniawan, The Jakarta Post, Jakarta

Mining companies that suspended their investment plans two years ago, especially due to legal uncertainty plaguing the sector, plan to become active again, according to a senior government official.

Director general of geology and mineral resources Wimpy S. Tjetjep said on Wednesday that 13 gold mining firms and one coal mining company were set to resume their investment plans.

He did not disclose the full list of the firms, but said it included Anglo-Australian Rio Tinto, which mines gold, and Australia's Broken Hill Proprietary Co. Ltd. (BHP), which mines coal.

He said that each company could potentially invest $2 million to $4 million to start its exploration activities.

He said that in a bid to provide legal certainty in the local mining sector, a general ruling that covered mining activities had been issued last year.

"We informed the companies that they would be given guidance by new government ruling No. 75/2001 on general regulations for mining activities until the new mining law was approved (by the House of Representatives)," Wimpy said.

The implementation of regional autonomy in 1999 caused jitters among mining firms operating in remote areas in the country as they feared local authorities might issue rulings in contradiction with their contracts of works.

The government has proposed a new mining bill to the House of Representatives to replace the prevailing Mining Law No 11/1967.

According to Wimpy, each company would potentially invest US$2 million and $5 million, or a total of US$28 million and $70 million to carry out preliminary exploration.

Elsewhere, Wimpy said that mining investment last year amounted to only Rp 400 billion (U$$38.5 million).

He did not provide any details.

According to data from PricewaterhouseCoopers, the country's mining investment for exploration stood at $67.3 million in 2000.