Mining
From The Report: Indonesia 2012
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Largely impervious to recent economic woes in the developed economies, Indonesia’s mining sector is riding high on a wave of high commodity prices. Meanwhile, the government has undertaken to revise regulations governing the sector in a bid to improve clarity and attract more investors. However, parliamentary opposition to some of the changes, including the removal of a requirement that foreign mining companies divest a majority of their companies to Indonesian entities, has resulted in uncertainty. Moreover, the government has clashed with mining companies over a measure that would require 99% refinement of all exports within five years of beginning production. Final clarification will be necessary to enable full investor confidence in this key sector.

This chapter includes an interview with Martiono Hadianto, President Director, Newmont and Chairman, Indonesia Mining Association (IMA).

Articles from this Chapter

Overview

Forward momentum: Increasing domestic production is capitalising on high prices
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Even as economic woes continue to grip the world’s developed economies, Indonesia’s mining sector has been on an impressive roll, with strong demand bolstering sales. Unlike the previous global downturns of 2007 and 2008, commodity prices surged in the first half of 2011 before dropping off slightly in the fourth quarter. This led to a windfall for many of the mining companies operating in the country, with year-on-year net profits soaring by double and even triple digits through the first…

Analysis

Gold standard: Two companies lead production of gold and copper
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Interest in the most reliable and safest of metals, gold, continues to bolster commodity prices even as enthusiasm for other metals flag, and Indonesia’s mining companies are keen to capitalise on this. LOWER PRODUCTION: Total gold production for 2010 reached 111,387 kg, according to data from the Directorate General of Mineral and Coal (DGMC), but production in the first half of 2011 did not keep pace with the 2010 performance, registering 40,806 kg. Copper production in 2010 amounted to…

Interview

Martiono Hadianto, President Director, Newmont, and Chairman, Indonesia Mining Association (IMA): Interview
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Interview:Martiono Hadianto What needs to be done to encourage investment in greenfield projects rather than simply expanding existing mining operations? MARTIONO HADIANTO: Production at existing mining areas will eventually decline and shut down. In order to maintain – or even increase – current production levels, the government has to undertake new mineral explorations in addition to expanding current projects. Exploration spending is essential for the future of this industry, and the…

Analysis

Elemental production: Varying tin prices impact local manufacturing output
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As the largest exporter of tin on the planet, Indonesia has been enjoying a wave of strong demand and rising commodity prices in recent years as regional economic growth has surged. Tin mining companies have been in for a wild ride in 2011, however, as tin prices diverged from those of other minerals and spiralled up and down throughout the year. These uncertain market conditions, combined with a number of other unrelated factors, have managed to hinder tin production, despite early predictions…