Mineral and coal investment in Indonesia is expected to decline until 2024, said chair of Indonesian Mining and Energy Forum - Photo by EMR Ministry Office

JAKARTA (TheInsiderStories) – Mineral and coal investment in Indonesia is expected to decline until 2024, said chair of Indonesian Mining and Energy Forum, yesterday (02/12). The reasoned, the construction of the plants and other infrastructure has occurred before 2020.

Singgih Widagdo, chairman of the association as quoted by Bisnis, other reasons, the government plans to control coal production, build the downstream projects and set up the limitation of the coal energy mix in the country. Then, the government will regulated the old contract to become a Special Mining Business License and there is no clear information when the existing contract will end.

He assessed that investment that must continue to be encouraged right now is in the mining exploration investment. In addition, the establishing a clear mining business area and an attractive auction system while minimizing the problem of overlapping becomes something urgent that must be resolved by the EMR ministry.

Based on the government data, the department targets the investment values in mineral and coal sector in this year to reach US$7.74 billion and in 2021 dropped to $5.69 billion. In 2022, its estimated to fall back to $4.35 billion and worth of $3.22 billion in 2023 and become $3.17 billion in 2024.

In 2015, the realization investment on the two sectors worth of $5.26 billion from the targeted $6.14 billion. Then, in 2016 jumped to $7.28 billion, but dropped again in 2017 of $6.13 billion. In 2018, the realization rose again to $7.48 billion and last year alone, lowered to $6.5 billion.

While, chairman of the Indonesian Mining Expert Association, Rizal Kasli as quoted by Kontan, the declining also triggered by the completion of smelters in 2022. He asserted, an effort to drive the investment is create a conducive and competitive conditions for the mining industry.

Especially on legal certainty, investment guarantees, simplification of bureaucracy and permits, cutting the length of obtaining licenses, access to land, taxes and a competitive tariffs, he adds.

Starting this month, the government and parliament resumed talks over new mineral and coal law to replace the then-law number 4 of 2009. According to EMR minister, Arifin Tasrif, there are 13 points in this revision, consisting of six government proposals and seven government and parliament proposals.

“First is solving inter-sectoral problems. Second, strengthening the concept of mining areas. Third, strengthening the added value policy,” Tasrif said at the hearing on Nov. 27, 2019.

Fourth, is to encourage exploration activities for the discovery of mineral deposits. Fifth, a clearer arrangement for the change of Work Contract or Coal Mining Work Agreement to a Special Mining Business License and sixth is the strengthening of state-owned enterprises.

In the new bill included the government’ role in fostering and overseeing the regional government, rearrangement of community mining licenses, and on special arrangements for concessionary permits.

“We also propose the rearrangement related to the period of Mining Business Permit or Special Mining Business Permit. The fifth proposals is a rearrangement related to the mining permit area,” he said.

Sixth, he went on, is to accommodate the ruling of the Constitutional Court and Law Number 23 of 2014 concerning Regional Government Law. Then, seventh is related to the environment, the minister adds.

About the revision, the civil society coalition considers that the need for discussion on the revision has not been spared from smoothing the exploitation of natural resources. Because there are points about no mining area limits.

Jaringan Advokasi Tambang (JATAM) explained that the draft law eliminates the article on criminal snares for officials who are proven to abuse the authority to grant mining permits. In the inventory list, there was an article that was omitted related to the corruption article, namely article 165.

The spokesman, Melky Nahar stated, the ratification pattern of the bill that seems haphazard and the rash is also inseparable from the conflict of interests of some members of parliament in the business of natural resources.

“The current law says that officials who misuse mining permits can be convicted of corruption. This is omitted in the bill revision,” he said in a written statement to TheInsiderStories.

He considered the acceleration of the discussion, seemed like an effort to accommodate the extension of a number of companies holding agreements that had been and would expire in the near future. Furthermore, there is a change in article 169 in the draft that makes companies that hold a contract of work and work agreement get an automatic extension for ten years in the form of a special mining business permit.

“The addition of article 115 A, which has the potential to criminalize citizens who express their rights to refuse to mine. The regulation reinforces article 162 of the old law,” he ended.

Written by Staff Editor, Email: theinsiderstories@gmail.com