Investment climate in mining sector remains gloomy

With the lingering problems related to the legality of mining operations in protected forests, the controversy over the licensing procedures in the proposed mining law and illegal mining operation would continue to impede mining activities next year, mining associations said.

Chairman of Indonesian Mining Association (IMA) Arif S Siregar said in Jakarta on Tuesday that with such lingering problems, investment climate in the country's mining industry would not change much next year.

Arif said that the controversy related to a number of provisions in the proposed mining law should be also resolved, especially on mining permits, he said. Arif noted that the term of mining permit in the proposed law should be replaced with mining right.

"It is important because a mining permit is not bankable while a mining right is bankable," he was quoted as saying by Bisnis Indonesia.

Meanwhile chairman of Indonesian Mining Society (MPI) Herman Afif Kusumo, said that government should be able to resolve such problems if it wanted to attract more investors to enter the country's mining sector. He said the first priority should be taken on removing the problem related to the legality of mining operation in protected forests.

"The double royalty payment as the result of the issuance of the regulation should be removed," he said, adding that under the new regulation, mining companies operating in protected are also required to pay royalties to the minister of forestry. (*)