Mining
From The Report: Indonesia 2013
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Long a stalwart of Indonesia’s economic development, particularly in terms of exports, the country’s mining and quarrying industry maintains a steady presence despite fluctuations in global commodity prices and domestic mining policies. Claiming some of the world’s most expansive reserves of valuable minerals and largest operational mines, the sector has seen some of the highest levels of investment of any industry in Indonesia’s economy in recent years. Uncertainties regarding legislation, along with the implausibility of the full implementation will likely remain after Indonesian elections in 2014 as the politically and socially sensitive ramifications of these issues give politicians little incentive to reform these policies ahead of a campaign. However, the country’s vast mineral reserves combined with an expected rebound in global demand and commodity prices should help to ensure that the current production downturn proves to be little more than a temporary blip.
This chapter contains interviews with Rozik B Soetjipto, President Director, Freeport Indonesia; Alwinsyah Lubis, President Director, Antam; and a viewpoint from Colin Ong, Managing Partner, Dr Colin Ong Legal Services and President Arbitration Association Brunei Darussalam.

Articles from this Chapter

Overview

Digging in: With a wealth of mineral resources the sector has much potential
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Long a stalwart of Indonesia’s economic development, particularly in terms of exports, the country’s mining and quarrying industry maintains a steady presence despite fluctuations in both global commodity prices and domestic mining policies. Claiming some of the world’s most expansive reserves of valuable minerals and largest operational mines, the sector has seen some of the highest levels of investment of any industry in Indonesia’s economy in recent years. RICH IN RESOURCES: According…

Analysis

Mixed signals: A slew of new legislation is creating confusion among investors
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Until recently, Indonesia had been content to give both international and local mining outfits a wide latitude in terms of how to most effectively profit from the extraction of lucrative mineral deposits, as the state took a share via various taxes, licences, royalties and other agreements. This well-established and stable regime was shaken up in 2012 with the implementation of two statutes originally laid out in the 2009 mining law: first, a requirement to refine raw minerals domestically, and…

Interview

Rozik B Soetjipto, President Director, Freeport Indonesia: Interview
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Interview: Rozik B Soetjipto What is your assessment of Indonesia’s current regulatory framework in the mining sector? ROZIK B SOETJIPTO: While local and international stakeholders seem to be concerned only with divestment obligations, taxation and downstream obligations, I actually prefer to talk about the government’s overall policy, which started with the enactment of Law No. 4 of 2009 and the creation of the Mining Business Licence, which replaces Contracts of Work (CoWs). Mining is a long-term,…

Interview

Alwinsyah Lubis, President Director, Antam: Interview
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Interview: Alwinsyah Lubis What sort of infrastructure will be required for mining firms to accommodate the scaling up of the minerals extraction sector? ALWINSYAH LUBIS: Currently, mining facilities are often established in remote areas, so it is not easy to guarantee their economic viability. In the future, this could be achieved if companies consolidated and cooperated in operating mines and smelting facilities. For instance, smaller mines could team up with larger ones at the domestic level…

Analysis

New ball game: As prices drop sector players are seeing increased competition
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Cementing its position as the world’s largest exporter of thermal coal, Indonesia increased its output of coal in 2011. Even as domestic production and export of minerals has entered a downturn, coal output increased 28.43% over the 2010 mark of 275.16m tonnes to reach 353.38m tonnes, according to data from the Indonesian Ministry of Energy and Mineral Resource’s (MEMR). However, The Jakarta Globe reported that ministry data from December 2012 showed a decrease in 2012 production at 304m…

Viewpoint

Colin Ong, Managing Partner, Dr Colin Ong Legal Services, and President, Arbitration Association Brunei Darussalam, on legal developments
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As the largest ASEAN country and one of the most tolerant nations in the region, Indonesia has been blessed with both an abundance of natural resources and a large population of diverse people of different religions living together in peace. Over the last five years, the national economy has developed at a faster rate than in many other ASEAN countries and there has been significant foreign investor interest in the country. On February 21, 2012 the Government Regulation No. 24 of 2012 an amendment…