Investment in mining may plunge to "zero" after 2005

State revenues from mining sector will continue to decline in the coming years due to the lack of new investment in new mining areas. After 2005, the state income from this sector could even plunge to "zero", Kompas reported on Friday.

The head of the research and development of the Ministry of Energy and Mineral Resources Wimpy S. Tjetjep said that the new investments had so far been directed only for the expansion of existing or old mining concession areas.

"Since 1997, no new investment has been put into new mining areas," he said. He, however, said that the state income in 2004 would remain "safe" because many of the existing mining areas remained productive.

Wimpy said that investment in the mining sector reached about US$34 million in 2003 but all of the new investments were used for expansion of the existing mining areas.

The lack of the investment in new mining areas has resulted in a sharp decline in state revenues from the mining sector. In 2003, the government expected to receive about Rp1.07 trillion from this sector, a decline from Rp1.31 trillion in 2002 and Rp1.74 trillion in 2001. (*)