Mining Potential is There, But Indonesia Needs to Look Harder, Analyst Says
Indonesia’s mining industry has the geological potential to reap benefits for another one hundred to 150 years, but the country needs to be more aggressive with its exploration, a mining consultant said this week.
“The best place to hunt elephants is in an elephant country, and there are elephant mines here,” said consultant Bob Parsons. “Indonesia has vast areas that haven’t been fully explored with modern technology.”
The country hosts operations by mining giants such as US-based Freeport McMoran Copper & Gold and Newmont Mining Corp., but the entire domestic mining sector need to ramp up efforts to identify giant mineral deposits in order to drive economic growth and create jobs, he said.
Parsons characterized the period between 1967 to 1997 as Indonesia’s “golden age of mining.” But development, he said, would continue to accelerate in the coming decades.
Indonesia could learn from Canada, where giant mining discoveries continue despite suggestions that resource depletion has accelerated, Parsons said. Canada’s advantage is that firms have used a wide range of technologies to locate deposits.
“Geologists there have come up with techniques to find new deposits in sites that have already been explored without luck,” Parsons said on the sidelines of a panel discussion held by the Indonesian Mining Association on the mining sector’s role as a driver for economic growth.
Bambang Gatot Ariyanto, director of coal and mineral development at the Energy and Mineral Resources Ministry, said that ongoing mining and exploration projects in neighboring Papua New Guinea - including Canadian miner Barrick Gold Corp.’s operations in that country - suggest that other massive deposits were waiting to be found in the Indonesian provinces of Papua and West Papua.
“[Papua and West Papua] haven’t been properly explored yet - investors should have a look there,” Bambang said.
But it isn’t easy to open massive mining operations in remote parts of Indonesia, he warned, and investors needed to consider a local taxes, in addition to regulatory conflicts between the Energy Ministry and the Ministry of Forestry.
“The mining law is clear, but Indonesia is always complicated. It isn’t that easy to enforce the law here.”
“The best place to hunt elephants is in an elephant country, and there are elephant mines here,” said consultant Bob Parsons. “Indonesia has vast areas that haven’t been fully explored with modern technology.”
The country hosts operations by mining giants such as US-based Freeport McMoran Copper & Gold and Newmont Mining Corp., but the entire domestic mining sector need to ramp up efforts to identify giant mineral deposits in order to drive economic growth and create jobs, he said.
Parsons characterized the period between 1967 to 1997 as Indonesia’s “golden age of mining.” But development, he said, would continue to accelerate in the coming decades.
Indonesia could learn from Canada, where giant mining discoveries continue despite suggestions that resource depletion has accelerated, Parsons said. Canada’s advantage is that firms have used a wide range of technologies to locate deposits.
“Geologists there have come up with techniques to find new deposits in sites that have already been explored without luck,” Parsons said on the sidelines of a panel discussion held by the Indonesian Mining Association on the mining sector’s role as a driver for economic growth.
Bambang Gatot Ariyanto, director of coal and mineral development at the Energy and Mineral Resources Ministry, said that ongoing mining and exploration projects in neighboring Papua New Guinea - including Canadian miner Barrick Gold Corp.’s operations in that country - suggest that other massive deposits were waiting to be found in the Indonesian provinces of Papua and West Papua.
“[Papua and West Papua] haven’t been properly explored yet - investors should have a look there,” Bambang said.
But it isn’t easy to open massive mining operations in remote parts of Indonesia, he warned, and investors needed to consider a local taxes, in addition to regulatory conflicts between the Energy Ministry and the Ministry of Forestry.
“The mining law is clear, but Indonesia is always complicated. It isn’t that easy to enforce the law here.”