Investment on mining slows down

Investment in the mining sector has been slowing down in the country because of the worsening social and political stability as well as the worsening legal certainty. Consequently, a number of mining exploration activities in a number of areas that are plagued by social and political tensions are disrupted or stopped altogether.

Speaking at a seminar on the prospect of mining investment held in Makassar on Saturday, PT International Nickel Indonesia (Inco) president Rumengan Musu said that the euphoria of reform movement in the country had caused difficulties to mining companies, especially those working on coal and gold mining activities.

He said that illegal mining activities became more intense and worrying, and legal suits by locals against mining companies had been piling up.

"The excess of reform euphoria that plagues coal and gold mining companies in Kalimantan has spread to other mining firms in other areas like Newmont in Minahasa and Inco in Soroako, Sulawesi," Musu said.

According to Musu, other problems that caused investment in mining to drop was the uncertainty on the next policy that the government would adopt in the mining sector.

He said Law No. 11/1967 on mining could not anymore accommodate the current problems and challenges that emerged in line with the increasing demand for regional autonomy, especially with the promulgation of Law No. 22/1999 on regional autonomy and Law No. 25/1999 on fiscal balance between central and local governments.

Therefore, he said, it was imperative for the Ministry of Mines and Energy to draft a mining bill to amend the 1967 mining law and, if possible, present it to the House of Representatives this year to be passed into law. (*)