Australia ready to invest US$4 billion in Indonesia's mining industry

JAKARTA (Jakarta Post): Australia's Senior Trade Commissioner Rod Morehouse said Monday that Australian firms were prepared to invest more than US$4 billion in Indonesia's mining industry.

"Australia has more than US$4 billion waiting to be invested," Morehouse told a press conference on the first day of the Ozmine exhibition and conference in Jakarta.

Craig Senger, first secretary to the trade commissioner, said the investment would come from both "existing players" here and also from new ones. He refused to give more details.

Earlier last year, Australia-based Rio Tinto Group expressed interest in investing $US2 billion in a nickel mining project in Sulawesi, expected to create 5,000 jobs as well as to build a nickel smelter capable of producing 46,000 tons of nickel metal per year.

The project was delayed due to ongoing negotiations between the government and the mining giant, which preferres a "nailed down" tax scheme rather than the progressive tax scheme proposed by the government.

Senger said prior to making new investments, Australian mining companies were waiting for clarity on Indonesia's mining industry's ongoing regulatory reforms, particularly those addressing a lack of coordination between the central and local governments, as well as the revision to the existing mining law.

"The companies are observing how well things are doing in this transition period," he added.

Energy and Mineral Resources Minister Purnomo Yusgiantoro is expected to deliver a speech focusing on the key issues in the mining bill, on Tuesday at the Ozmine exhibition.

This year's exhibition features twice the number of companies exhibiting last year and is sponsored by Rio Tinto, PT Leighton Contractors, the Indonesian unit of Leighton International Limited, BPH Billiton, Thiess Contractors Indonesia and Orica Mining Services.(lva)