Foreign investments on downstream mining sector expected to rise
Friday, May 11 2012 - 01:22 AM WIB
As the government tightens export of mineral ores, foreign investments on downstream mining sector are expected to rise in coming years, Chairman of Investment Coordinating Board Gita Wirjawan said.
?Foreign direct investment on mining has been flat in the last two or three years. But we expect a big jump on downstream mining sector in coming years,? he told Petromindo.com.
Gita argued that the requirement to process mineral ores would open opportunities for foreign fund to enter downstream sector as the government policy would make certain of the supply of mineral ores to be processed.
The government has put a ban on export of 14 metal ores starting May unless the miner or exporter proposes a concrete business plan to soon build a smelter, and also pay export duty of 20 percent, in addition to a commitment to stop export of such raw material by 2014.
Foreign direct investments on mining sector in the first quarter reached less than 20 percent of the total foreign direct investment of Rp 51.5 trillion (US$ 5.6 billion), Wirjawan said.
?The regulation to stop export on mineral ores would attract more foreign funds coming into the downstream of mining sectors. Processing raw materials would bring much more added-value,? he added.
Indonesia has regained second credit rating upgrade from Moody?s Investor Service on Jan. 18 following similar suit done by Fitch?s rating agency on Dec. 15, allowing foreign funds managers to allocate funds to emerging Indonesia.
Editing by Adianto P. Simamora