Indonesian mining sector hampered by late regulations
Wednesday, 28 Oct 2009
The Jakarta Post reported that Indonesia may have to wait for a potential massive inflow of new investment into the mining sector due to delays in preparing the implementing regulations needed to make the revised mining law effective.
Mr Witoro Soelarno secretary to the directorate general for minerals, coal and geothermal energy at the Energy & Mineral Resources Ministry said that "The formulation of the implementing regulations involves various departments. Thus, I cannot guarantee the implementing regulations can be finished by January next year."
Under the new mining law, endorsed by lawmakers in December last year, the government is required to issue four implementing regulations respectively for mining areas, coal and minerals businesses, mining supervision and finally on reclamation and post-mining issues.
Mr Witoro said that the draft regulations involved several difficult points. The law also requires that the implementing regulations be issued within one year of its enactment.
Mr Priyo Pribadi Soemarno executive director of Indonesia Mining Association said that delay in the issuing of implementing regulations would obviously slow investment. He added that "One of the complicated issues that we have yet to reach an agreement is about land planning. This will create uncertainty for investors, and they will miss the momentum for investment."
In an earlier interview, Mr Priyo said there were five mining projects already in the pipeline but on hold due to problems with license approvals from both central and regional governments. The projects are estimated to have an investment value of between USD 8 and USD 10 billion.
