Monday, September 28, 2009

Indonesia unlikely to pass new mining rules this year

Source: Reuters/ Fitri Wulandari; Ed Davies

Indonesia is unlikely to complete final regulations attached to a new mining and coal law this year, an official said, creating more uncertainty for a sector that is already struggling to attract new investment.

The government has been drafting regulations on the new mining and coal law passed in December 2008 for presidential approval, and had said they should be issued by October when a new administration under President Susilo Bambang Yudhoyono is due to start a second term.

Bambang Gatot Ariyono, director of mining and coal production at the energy and mines ministry, said ministries including the forestry and finance Ministry with vested interests in the regulations had yet to respond to the drafts proposed by his office.

"Looking at the progress, we doubt the regulations can be completed this year," said Ariyono, who did not say when he thought the regulations were likely to be completed.

Issuing the regulations is seen as crucial to providing more certainty for mining investors in Southeast Asia's biggest economy.

But analysts have said it may take more time to issue the regulations. In the case of an oil and gas law passed in 2001, it took three years to issue the implementing regulations.

With the delay, the sector is unlikely to see fresh investment in the near future as the government has frozen new mining permits until the regulations are finalised and there may be further delays under a new here to view full news by Reuters