Wednesday, 19 October 2011


The prospect of investment in mining industry in Indonesia was still appealing, whether to contractors, suppliers, consultants and other parties. Exploration activities still needed tools and equipments, as well as beneficial collaborations. This was visible in the great enthusiasm among foreign companies, national private companies and state-owned companies at the Mining Indonesia conference. A foreign company from Poland, Kopex Group, offered solutions for underground system. Kopex did not specialize in exploitation or exploitations but high tech equipments for underground. Meanwhile an Australian company, Index offered site support services including various boring equipments. “We see that the potentials are high for the mining sector in Indonesia” Peter keinhoster of Hazemag Germany told Business News (23/9).

Meanwhile one of the coal mining companies in Kalimantan still saw the problem of overlapping regulations, because the central Government and Provincial Government tend to play tug-of-war in mining operations resulting in minimized investment. On the other hand mineral resources in Indonesia’s main islands were still abundant. “We hope that there would be not too much amendments of regulations made. The Minerba Law (Number 4/2009) was probably superficially good, but the execution afield turned out not as good as expected” Edwin W. Santoso, one of the coal miners in Kalimantan remarked.

Foreign companies, including suppliers for tools and equipments depended their business on the intensity of exploration and exploitation in mining. Heavy equipments technology from Germany, China, Korea and Australia were prevalent in mining industry in Indonesia. Beside buying and selling there were also companies operating by rental system of equipment in mining sites. “If exploration and exploitation were at high time, our sales go up. Exhibitions were mostly benefied for branding. There one also foreign companies who market their products through distributors or sales agents. The companies are not directly involved in transactions but it was the distributors who communicate with mining contractors.” Edwin remarked.

Worries about exhausted mineral reserves in Indonesia was in fact nothing new it was estimated that mining exploitations was still sustainable for the next 10 to 20 years. To illustrate, coal exploited in Kalimantan were used to supply need in China and India; the two countries were in the process of development so they needed energy including coal. Geographically Indonesia has regions treasuring mining resources of different quantity. Mining is still potential in Kalimanatan and Sumatra, while nickel is found more in South Sulawesi white metal is found in Central Java and East Java. “The heavy equipments are also found not only in mining sites but also in factories. For example German machineries Hazemag are used in Cibinong cement factory West Java; as known cement which is made of lime stones must undergo the fuzz and scan process before turned into cement Mineral of soft medium rods category normally had to undergo such phases as fuzz, scan etc. The raw materials are processed into finished goods that are ready for use”.
In a different location, mining consultant Stephen Hughes said that exploration companies played an important role in the search for gold and copper in Indonesia. Contents of these two types of minerals were great in some regions in Indonesia including Papua. In times when certain mining commodities were in high demand, beginner miners started to increase their capital investment. In the present condition, the expenses needed for explorations came to 50 percent of world’s need each year. The 50 percent was equal to around USD 5 billion to USD 6 billion. The companies had been active in probing projects at lower level in many countries in the world including Indonesia. “A very common case, with high risk, but the result is also high, High risk, high reward” Stephen told Business New (22/9).

The mining exploration strategy, in remote areas or in expansive areas, was always linked to exploration cost. Such was reasonable because quite frequently explorations were hindrance by shortage of logistics. The result was that money spent soared up high, cases in Indonesia were the examples. In a geographic condition where thousands of square meters of mining sites were spread out in mineral-rich earth, the abundant resources were evident. “If only Indonesia were serious about drawing foreign investors to explore mining resources, the process it self shouldn’t be too hard” Stephen concluded.    

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