Investment in mining sector to drop by 70 percent in 2009

The Indonesian Mining Association (IMA) said on Wednesday that investment in mining sector would drop by 70 percent in 2009 due to the sharp decline in the global price of commodity.

Executive Director of IMA Priyo Pribadi Soemarno said the country's mining production would go down by between 20 and 30 percent in 2009 as miners are cutting output due to the sharp decline in the commodity prices.

He said the country's mining industry has to carry out efficiency program to cope with the crisis. The government should help by providing tax incentives and making it easier for miners to get licenses.

Director General of Mineral, Coal and Geothermal Resources at the Ministry of Energy and Mineral Resources Bambang Setiawan agreed that investment in the mining sector would drop.

He warned that some mining and oil and gas companies could also be forced to lay off some workers like manufacturing sectors were doing at present. Companies that perform well might not lay off their workers but they would delay or cancel plans to recruit new workers. (*)