Social, legal uncertainty scares mining investors
Monday, June 26 2000 - 03:15 AM WIB
Director general of mining Surna T. Djajadiningrat said at the weekend that social and legal uncertainty in the country has scared mining investors.
Surna said that this uncertainty has been a primary factor behind the decision of several mining companies to suspend its operation.
He said that the other factor was poor financial condition due to lower mineral prices and bearish stock market.
"This is my personal concern. If the (mining) condition continues to be plagued with uncertainty more mining companies will ask for suspension," Surna told the Republika daily in an interview.
Mining companies in Indonesia have grabbed media attention not because of a new gold find but due to various negative reports including fatal landslide incident, dispute with local villagers, clash with employees, and environmental destruction.
But head of the Ecomine Nusa Lestari, an NGO, Rachman Wiriosudarmo dismissed suggestion that the suspension of the mining operation was caused the country's social and political condition.
He said that the primary factor was the poor financial condition of the mining companies. He said that they decided to stop their operation and then put a blame on the country's social and political condition.
Rachman said that it is the geological condition of a country, not social and political condition, which is the primary factor for mining companies to stay or abandon.
He also said that it is not easy for mining companies already operating in Indonesia to move to other potential mining sites like in Vietnam and Cambodia because of the military regime in the two countries, and the massive land mines inherited from the previous civil war.
President of gold mining firm PT Newmont Nusa Tenggara (NNT) Tom Enos, however, said that what scared most investors was uncertainty factor. "If this uncertainty continues, this scares us," he said.
Republika said that in the period of 1998-2001, at least 28 mining firms have asked for a suspension of between 3 to 12 months. The companies included (according to a data from the director general of mining) PT Natarang Mining, PT Barito Intan Mas, PT Meratus Sumber Mas, PT Kasongan Bumi Kencana, PT Paragon Perdana Mining, PT Freeport Indonesia (block B), PT Nabire Bakti Mining, PT Irja Eastern Mineral, PT Permata Kalindo, PT Pasifik Masao Mineral, PT Siriwo Mining, PT Kutaraja Tembaga Raya, PT Newcrest Nusa Sulawesi, PT Cyprus Amax Iriana, PT Kalimantan Surya Kencana, PT Barrick Mutiara Woyla, PT Mineralindo Mas Salawati, PT Persuit Mahakam East, PT Samideco Metalindo, PT Pelsart Tambang Kencana, PT Yamana Kalindo One, PT Kalsika Indonesia, PT Iriana Sentani, PT Mineralindo Mas Aceh, PT Masmindo Dwi Area, PT Mineralindo Mas Tapaktuan. (*)