Foreign banks scared to fund mining projects in RI

The government said the foreign banks are currently scared to fund the mining projects in Indonesia. The banks see Indonesia as a country which do not have the rules that guarantee legal certainty to invest in a safe manner and on the long-term basis, Investor Daily Indonesia newspaper reported in its Thursday edition.

?We see there is that kind of signal. There was a proposal submitted by X mining company and the bank (foreign) was very much interested but it didn?t materialize after they saw the location in Indonesia,? deputy director of investment at the Ministry of Energy and Mineral Resources? Directorate General of Geothermal Energy and Coal Deposits, MS Marpaung told the Investor Daily on Wednesday in Jakarta.

According to Marpaung, foreign investors like Freeport, Newmont, Inco, Rio Tinto and BHP Billiton are actually interested in Indonesia. But they have only projects with concessions and they may not be having internal funding.

Mining investors, he continued, generally like to borrow money from banks for mining projects.

"That?s why, the government is trying to finish the draft law on coal and minerals, whose discussion is likely to be finished soon. This new law will be an answer to the problems in the mining sector, especially after the implementation of the Regional Autonomy Law," he added. (*)