TEMPO.CO, Jakarta – Companies engaged in the mining sector are delaying their plans to go public this year, out of fear that market will not fully absorb the equity offered. Iskayoga, executive director of the Indonesian Listed Companies' Association (AEI), gave a short term projection for the domestic mining sector, saying its potential and attraction will remain low.

Although the Indonesia Stock Exchange (IDX) has issued new regulations that make initial public offerings easier, it is considered not enough to attract mining companies to go public. In addition to sluggish commodity prices, another thing that these companies consider is underwriters' ability and willingness to guarantee a mining IPO.

IDX Regulation No.Kep-00100/BEI/10-2014 stipulates that a company that has a mining permit (IUP) can hold an IPO even if it has not started operating yet under the condition that after four years the company will have booked profits. The lax rule was published to multiply funding alternatives.

Bianto Surodjo, director of PT Bank Permata Tbk., said that one of the sectors that banks tend to avoid lending to is the mining sector, because of the current commodity prices drop. "The decline has been difficult to predict," Bianto said when visiting Tempo's editorial office yesterday.

FAIZ NASHRILLAH