Mon, 31 Oct 1994

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.


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.


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)