JAKARTA, Dec 31 (Reuters) – Indonesian mining investment is expected to hit $2.5 billion next year, up from $1.81 billion in 2009, supported by greater certainty after the introduction of new mining regulations, a senior government mining official said on Thursday. Southeast Asia’s largest economy has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations tied to a new mining law passed in 2008. “We expect investments to reach $2.5 billion next year as we hope to see more new investors if the new mining rules are going well,” said Bambang Setiawan, Director General of Mineral, Coal and Geothermal at the Energy and Mining Ministry. Major global resource firms operating in Indonesia include Freeport-McMoRan Copper & Gold Inc (FCX.N: Quote, Profile, Research) and Newmont Mining Corp (NEM.N: Quote, Profile, Research), but much of the investment was made decades ago. Some foreign firms have already shelved investment plans since last year, partly due to uncertainties over the new mining law, which also includes contentious items such as shorter-term mining permits rather than longer-term contracts of work. Miners will also have to process minerals in Indonesia and to set aside some of their coal for the domestic market. Setiawan said registered investment should also rise because more small and individual miners were required to report their mining and investment activities to the government under the new law. Previously, only big mining companies which had signed contracts of work with the government reported, so that investments from small miners were not included in the official records. The government had said it plans to issue 4 new regulations attached to the new mining and coal law in January, 2010.
Source: Reuters.
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