Mining Association: Frequent Law Amendments Disrupt Investment

TEMPO.CO, Jakarta - Indonesian Mining Association executive director Priyo Pribai Soemarno called on the government not to frequently amend laws on mining investment, particularly Law No. 1/2017 on Mineral and Coal Mining Businesses.

"I hope that the regulation will not be frequently amended. Otherwise, it will disrupt investments," Priyo said in a discussion held in Jakarta on Monday, February 6, 2017.

According to Priyo, investment in mining business is a long-term investment. Priyo added that funds used by investors in the mining sector were not obtained from regular banks, but from insurance and retirement funds, for examples, with low-interest rates.

"Why low-interest rates? Because mining industry is risky. Out of 100 exploration activities, only four are successful, and the rest exploration activities fail," Priyo explained.

Priyo revealed that a company usually prepares cost recovery of its business expansion fails. However, such method does not apply to a mining business.

Therefore, Priyo hoped that the government could draft a regulation that will last for a long period, particularly for the mining sector. Priyo suggested that an exploration permit can last for 20 years.

DESTRIANITA