Mining industry has bright future, businessmen say

Mining industry has bright future, businessmen say

JAKARTA (JP): The Indonesian mining industry is facing a
bright future due to the country's economic stability and the
consistency of its regulatory framework, visiting foreign
business leaders say.

"Indonesia's mining industry is growing very well because the
government has been able to maintain the country's economic
stability for a long time," the executive director of the China
National Gold Corporation, Hou Jian Ping, told The Jakarta Post
here on Saturday.

For foreign investors, economic stability is very important
because it will guarantee investments in the long-term, high-risk
mining industry, he said.

Ping was here to attend the Fourth Asia-Pacific mining
conference and exhibition, organized by the ASEAN Federation of
Mining Associations in cooperation with international mining
institutions.

The four-day conference, officially opened by Minister of
Mines and Energy I.B. Sudjana, closed on Saturday.

Ping said he was optimistic that many Chinese mining companies
will be interested in exploring opportunities for mining in
Indonesia in the future.

"My company, for example, will cooperate with PT Aneka Tambang
gold exploration in Kalimantan and Sumatra next year," he said.
He expected that a deal on the cooperation will be finalized as
soon as possible.

Regulation

A councilor of the Australasian Institute of Mining and
Metallurgy, Tony Osma, told the Post that he highly appreciated
the Indonesian government's efforts to improve the regulatory
framework of the mining industry. The policy aims to attract more
foreign investments to the country.

"If you look back to the last decades, you can see how rapidly
the changes have taken place in the Indonesian mining sector. The
PP20 regulatory package is a good example of the government's
pragmatic approach to this matter," he said.

Under the PP20 regulation, the government allows foreign
investors to hold 100 percent equity ownership, to construct and
operate infrastructure facilities and eases requirements on
reduction of equity ownership.

Osma said he believes that Indonesia will be become the
biggest mining producer in the world because it has a lot of
natural resources to offer to foreign investors.

Australian companies are now rushing to Indonesia to explore
for various minerals, he said, adding that Australian companies
dominate venture cooperation in Indonesia, followed by Canada.

He cited as examples that Kaltim Prima Coal, which operates a
major coal mine in East Kalimantan, and Kelian Equatorial Mining,
which operates a gold mine in the same province, are both
controlled by Australian investors.

Incentives

Ping suggested that the Indonesian government offer more
incentives and subsidies to foreign investors to operate in
frontier areas.

Jon Baird, an executive of the Canadian Association of Mining
Equipment and Services for Export, added that Indonesia should
imitate Australia in terms of tax policies, incentives and the
regulatory framework for attracting foreign investment.

Mike Katz, an associate director of the Australian Key Center
for Mines, said that Indonesia needs to develop mineral geologic
studies for helping foreigners to identify the prospects of
minerals.

"Proper infrastructure and human resources are also important
for the country's mining industry," he said.

Nikolay Belakov, an executive of the Russian Coal Industry,
Rosugol, told the Post that his company is looking for
cooperation with local companies for mining activities in
Indonesia. (fhp)