Mining & Engineering Indonesia presents new products from Indonesia and beyond


Mining & Engineering (M&E) Indonesia 2012 connects Indonesian mining industry to the world, bringing representation from Australia, China, India, Singapore, Taiwan and United Kingdom to Indonesia. M&E Indonesia 2012 will be held from 10 to 12 October at the Jakarta Convention Centre.

The inaugural M&E Indonesia 2012 welcome some 89 participating companies from 11 countries, creating an opportunity for Indonesia’s mining industry to establish new business contacts for future business partnerships. Major heavy equipment players such as Volvo East Asia (Pte) Ltd, PT. Hexindo Adiperkasa (representing Hitachi), Tbk, Caterpillar Inc. and PT. Swadaya Tractor Adiperkasa (representing Hyundai) will also be present.

24.5% of the participating companies will be showcasing new products, including software, slope monitoring system, spare parts for excavators, tools and safety products, amongst many others.

Mr Clive Phillips, General Manager of Reed Panorama Exhibitions commented, “This inaugural conference-driven event serves as a soft launch for us to penetrate the Indonesia mining sector, with REEDMININGEVENT’s brand of Mining & Engineering (M&E) – a dedicated mining event for the Indonesian market. We are glad that this first event will bring some 87 local and international participating companies.”

“In partnership with IMA and Quad M.I.C.E., the exhibition will come with a premier conference - The Asia Pacific Mining Conference (APMCI). Together, the exhibition and conference provides a meaningful and educational platform for the industry.”

With the recent changes in regulatory policies, the Indonesia’s mining industry is undergoing tremendous challenges. The Asia Pacific Mining Conference Indonesia (APMCI) 2012 will serve as a discussion platform with insights/inputs from the Indonesia Ministry of Energy and Mineral Resources, trade associations, consultancy firms and financial institutions. Another burning issue that will be discussed at APMCI is the challenges and opportunities of setting up a smelting plant to process the minerals before exporting.

Mr Pambudi Prasetyo, Project Director for APMCI 2012 commented “Industry players will benefit from the array of topics covered during this 2-day conference, investment opportunities from the policy changes and export constraints, to in-depth discussion on smelter projects.”

“The conference will bring in several representatives from the ministries, associations and consultancy firms to discuss investment opportunities and global outlook for coal/minerals’ demand. An interesting focus is the presentation on smelter projects by OSO Group Holding, PT Antam (Persero) Tbk, PT Bosowa Mining, PT Vale Indonesia Tbk and Haver & Boecker on Day 2 of the conference.”

M&E Indonesia 2012 will take place between 10 and 12 October 2012 at the Jakarta Convention Centre, Indonesia. For more information, please visit the official website at APMCI 2012 will be held from 10 to 11 October 2012.

Indonesia’s Rule No. 24 likely to embolden other nations to grab more from mining

Indonesia surprised the global mining community last week after a new rule - Government Regulation No. 24 of 2012 – was quietly announced on the mining ministry’s website.

The country – southeast Asia’s largest economy – will now require all foreign mining companies to sell majority stakes in their mining operations to locals by the tenth year of production.

Indonesia, with a population of 240 million, is the world’s premier thermal coal exporter, a tin powerhouse and is also rich in gold and copper.

Freeport McMoran’s Grasberg mine in the west Papua, a province of Indonesia, is one of the world’s biggest mines. It has the globe’s richest gold deposit and is second in copper.

Grasberg has been the site of violent clashes, sabotage and strikes over many years. Mining makes up roughly 12% of Indonesia economy and Grasberg is the country’s largest taxpayer.

Freeport and other miners operating in Indonesia are currently locked in royalty discussions with the government and some in the industry have speculated that the new regulation is not much more than a ploy to strengthen the government’s hand in negotiations.

An editorial in the Jakarta Post argues that Rule 24 should not have come as a surprise, but nevertheless takes the Indonesian government to task over its timing which “seems to make things even murkier and heightens uncertainty as, over the last few months, the government has been strong-arming foreign miners over contract re-negotiations [...] and [to] submit concrete business plans to build processing plants or smelters as they can no longer export unprocessed minerals after 2014.”

A growing list of nations – and not just radical fringe territories such as Zimbabwe or Venezuela – but stable jurisdictions including Poland, Ghana and Botswana are pushing for greater control and ownership of the resource sector on top of higher taxes and royalties.

South Africa recently stepped back from nationalization, but is nevertheless tightening its grip on the industry. Other countries, including Indonesia are putting a stop to raw exports and requiring domestic processing and beneficiation of mining output.

Last year according to an Ernst & Young survey of the world’s 30 largest miners, resource nationalism jumped to the top of the risk list in 2011 from fourth in 2010, after 25 countries announced their intentions to increase their take of the mining industry’s profits and others contemplate outright nationalization.

The Vancouver Sun reports smaller operators would be hurt much more than major projects and sums up the situation this way: “Cash-rich mining companies, raking in profits from metal prices that are well above historical levels, have emerged as easy targets for governments. Higher taxes and royalties on big miners are often used by politicians as populist moves to help rally the public and serve as platforms ahead of elections.” reported in January as attractive deposits become harder and harder to find in traditional markets, miners – especially those exploring for gold – are pushing the limits of the political risk they are willing to take on.

Research house Maplecroft in its 2012 political risk atlas identifies DR Congo, South Sudan, Myanmar, Turkmenistan, Iran, Guinea, Zimbabwe, Venezuela, Iraq, Bolivia, Russia, Kazakhstan, Angola, Nigeria and Libya as resource nationalism hotspots.

As an indication of how Indonesia’s move has surprised the industry it was missing from Maplecroft’s list released in January of countries that faced “extreme risk” and the researcher actually said investment risk in the country had decreased from the year before.

Also missing was Papua New Guinea which this year heads into elections that many observers have warned is bound to lead to civil unrest. In August last year the country’s leaders introduced a plan to hand state ownership of mineral and energy resources to landowners, a move that may prove disastrous to foreign miners developing massive projects and pushing into new regions of the resource-rich country.

Eurasia Group points out that already the world’s biggest gold mines are in so-called frontier markets:

  • Uzbekistan (state-owned Muruntau)
  • Papua New Guinea (Lihir, owned by Newcrest Mining and Harmony’s Wafi-Golpu project that has potential to rival Lihir in size)
  • Mongolia (Ivanhoe and Rio Tinto’s Oyu Tolgoi, which last year became a state target)

And new mega-mine projects such as Newmont’s $4.8 billion Conga project in Peru, Barrick’s Pascua Lama (straddling Chile and Argentina) face opposition from environmentalists and locals.