Government seeks to increase ?local content? in mining sector

By Brigida Ernestina Elu Wea

The Ministry of Energy and Mineral Resources has set a target for mining companies in the country, both mineral and coal, to increase the use of locally-made goods and services in their mining operations in a bid to help domestic manufacturers and services companies amid the challenge of rising imports.

Director General of Mineral and Coal at the ministry Bambang Gatot Ariyono said on Wednesday that so-called ?local content? in the mining sector this year has been targeted to increase to 62 percent of miners? expenditure from 60 percent last year.

Speaking to reporters on the sidelines of a discussion on local content in the mining sector, Bambang said that the use of local goods and services in the mining industry has been on the rise, increasing by an average of 11 percent per year in the past five years.

The government introduced a few years ago, local content provisions in various sectors in a bid to help domestic manufacturers to compete against imports, triggering complaints from foreign countries as the regulations are seen to be in breach of World Trade Organization ruling.

Bambang, however, acknowledged that there are several problems in implementing the local content provisions including in terms availability of required products, capacity of domestic manufacturers, quality and price issues.

Editing by Reiner Simanjuntak