Upload
umesh-shanmugam
View
14
Download
0
Embed Size (px)
Citation preview
THE INDONESIAN MINERAL MINING SECTOR: PROSPECTS AND CHALLENGES
Djoko Widajatno, Irwandy Arif Association of Indonesian Mining ProfesionalGERMAN INDONESIA MINING TECHNOLOGY SYMPOSIUM 2011
Hotel Borobudur, Jakarta Indonesia 13-04-2011
1
Agenda
1
PROSPECT OF INDONESIA MINERAL RESOURCES
2 3 4 5 6
INDONESIA MINING MAP IN THE GLOBAL CONTEXT
INDONESIA MINING MAP IN THE INDONESIA INVESTMENT CONTEXT NEW MINING LAW (UU MINERBA) CONDITIONS AND ACTUAL CHALLENGES OF INDONESIA MINING INDUSTRY
CONCLUSION
2
1
PROSPECT OF INDONESIA MINERAL RESOURCES
3
DISTRIBUTION OF COPPER AND NICKEL DEPOSIT IN THE ASIA PACIFIC REGION7 6 28 4 5 9 16 27 2 1 3 8 18 25 24 23 21 20 22 10 11 13 Porphyry deposit > 1.0 Mt Cu Nickel deposit > 0.5 Mt Ni 12 15 17 14
26 0kilometers
2000 19
274
DISTRIBUTION OF GOLD DEPOSIT IN THE ASIA PACIFIC REGION
6 7 1 2 3 4 5
11
12 14 13 15 16,17 Gold deposit (> 5.0 Moz) Gold deposit or occurrence
22
19 18 21 0kilometers
23
25 24 26
27 285
2000 20
Source: Ministery of Energy and Mineral Resources Indonesia - 2010
6
MINERAL RESERVES AND RESOURCES IN INDONESIA
NOTES Bauxite Gold Plaser Gold Manganese Nickel Iron sand Silver Copper Tin
7
MINERALS AND COAL RESOURCES(As of December 31st 2007)
COMMODITIES Tin (metal) Nickel Ore Copper (metal) Primary Gold (metal) Silver (metal) Iron Sand (concentrate) Bauxite (metal) Manganese (metal) Diamond Granite (non metal) Coal
UNIT Ton Ton Ton Ton Ton Ton Ton Ton Carat Ton Ton
RESOURCES 622,627 1,650,418,000 68,960,881 4,163 505,151 267,337,519 469,879,260 866,795 539,800 54,731,230,000 104,943,590,000
RESERVES 462,402 585,209,103 41,473,267 3,394 23,026 4,732,000 23,999,901 105,000 93,565 21,131,840,0008
Data from : Directorate of Mineral Resources Inventory
Indonesia Metaliferous Mineral Resources 2007Million Tonnes1800 1600 1400 1200 1000 800 600 400 200 0
1650.42
1565.20
741.30 267.34 10.58Nic kel Iro n Or e
382.24 5.78 1.64 71.31 23.70
Pla Pla La Se Pri Pri La Ma ter ter dim ma ma ng cer cer i tic i tic an ry ry en Ch T it es Iro Ch Ti t tar Iro an rom e n rom an yI n iu m ite ium ro n ite
Or e
Precious Metal ResourcesTon700000 600000 500000 400000 300000 200000
622626.93 505151.07
13031.00100000 0 Tin Platinum
4162.55
123.00Placer Gold Silver
Primary Gold
Indonesian Mineral Resources for Metaliferous 2007Base Metal ResourcesMillion Tonnes70 60 50 40 30 20 10 0 Mercury Copper Zinc Lead Molibdenum Cobalt
68.96
0.00008
5.99
3.00
0.21
1.30
Rare Metal ResourcesMillion Tonnes
648.87926
700 600 500 400 300 200 100 0 Bauxite Monazite
0.01
IRON PLACER
Indonesian Mineral Resources for Metaliferous 2007
Millions 302.00
252.00
202.00
152.00
102.00
52.00
IRON OREMillions
2.00
2004
2005
2006 4,732,000
2007 4,732,000
Resources 73,050,035.47 165,075,794 5,332,000 4,732,000 Reserves
165,108,739.9 267,337,519.3
402 302 202 102 2 Resources Reserves
2004 320,462,611
2005 320,462,611
2006 368,493,173 2,216,005
2007 382,243,211 2,216,005
RESOUCES AND RESERVES METALIFEROUS INCREASEMANGANESEMillions 35.00
30.00
25.00
20.00
NICKELMillions
15.00
10.00
1,500 1,300 1,1002004 2,471,243.55 284,000 2005 8,273,052 884,000 2006 9,091,105.05 32,738,682 2007 10,583,756.98 32,703,889
5.00
Resources Reserves
900 700 500 300 100Resources Reserves
.
2004 1,428,582,200 450,590,000
2005 1,681,655,200 437,504,950
2006 1,415,058,000 588,887,776
2007 1,650,418,000 585,209,103
Indonesian Mineral Production Survey
Data from : DPPMB - 2011
Resources and Production of non-metaliferous 2007
Indonesia non Metaliferous Production and Resources 2007
2
INDONESIA MINING MAP IN THE GLOBAL CONTEXT
16
INDONESIAN MINING IN THE WORLD CONTEXT
1. 15th rank of world coal reserve: Coal resources estimated around 104billion tons with mineable reserve approximately 21 billion tons
2. 7th rank of world gold reserve: Gold resources estimated around 4,163tons with mineable reserve approximately 3,394 tons
3. 7th rank of world copper reserve: Copper resources estimated around68.96 million tons with mineable reserve approximately 41.47 million tons
4. 5th rank of world tin reserve: Tin resources estimated around 0.622 milliontons with mineable reserve approximately 0.462 million tons
5. 8th rank of world nickel reserve: Nickel ore resources estimated around1,650.4 million tons with mineable reserve approximately 585.2 million tons
(Source: Indonesian Mining Association, 2007)17
COMPARATIVE ADVANTAGES (NATURAL RESOURCES)
18
Policy Potential IndexFraser Institute Index 2010-2011
19
Mineral Potential IndexFraser Institute Index 2009-2010
20
Exploration and Spending Conditions based on Countries(PricewaterhouseCoopers-mine Indonesia 2007)
21
Indonesia Mine Profitability versus Global Average(PricewaterhouseCoopers-mineIndonesia 2007)
22
3
INDONESIA MINING MAP IN THE INDONESIA INVESTMENT CONTEXT
23
STATE OBJECTIVE 2010 - 2014Key IndicatorsEconomic Growth Inflation Unemployment Poverity Investment
Target6.3 6.8% average per year 7 % average, 7.7 % by the year of 2014 4 6 % average per year 5 6 % by the end of 2014 8 10 % by the end of 2014 Rp. 1.950 trillionSource : RPJMN 2010-2014 (Govt Reg. no 5, 2010)
2009 Growth (%) GDP (Rp Trilion) Infrastructure Demand 5% GDP (Rp. Triliun) 5.1 5,206.5 260.3
2010 5.5 5,989.5 299.5
2011 6.2 6,718.3 335.9
2012 6.8 7,632.3 381.6
2013 7.3
2014 7.7
8,611.0 9,523.3 430.6 476.2
Total Infrastructure Investment Demand (2010 2014) Rp. 1,923.8 TrilionSource: Bappenas, Paparan Menteri Bappenas dalam Rakor Menko Ekonomi tentang Investasi Infrastruktur Agustus 2010
Trends in the Indonesian mining industry(PricewaterhouseCoopers-mine Indonesia 2007)
The mining industry is important to Indonesia. It is a substantial provider of export earnings, economic activity and employment, and support regional development. The government remain passionate about the potential untapped mining reserves in Indonesia. With some further improvements to the business environment there is no reason why this resource would not be developed and Indonesia could once again attracts more share of global mining exploration allocation. 2006 was another spectacular year for the mining industry, both in Indonesia and globally-and with the commodity prices at their current highs, 2007 and 2008 will see even better financial results. Globally, investor confidence in the sector and its prospects has remaining strong, fuelled by a sustained rise in commodity prices, and as witnessed by a year of significant growth in market capitalization on both international bourses and the Indonesian 25 exchange.
To be an important contributor to the Indonesian economyThe mining industry is important to Indonesia. It is a substantial provider of export earnings, economic activity and employment, and support regional development. The government remain passionate about the potential untapped mining reserves in Indonesia. With some further improvements to the business environment there is no reason why this resource would not be developed and Indonesia could once again attracts more share of global mining exploration allocation. The mining industry contribution to the overall Indonesian economy increased significantly in 2011 in comparison with previous years. Owing to the high commodity prices, mining products accounted for approximately 6.2% of the total Indonesian GDP, up from 1.1% in 2009 (Badan Pusat Statistik26 Indonesia).
REALISATION AND ESTIMATE OF INDONESIA COAL PRODUCTION
400280 Million tonnes 320 220 150 130 170 150
370
300193 196 147 198 148 50 150 75
225 145 48
240 150 90
200 100 0
150
49
2006 Export
2007Production
2008
2009
2010
2015
2020
2025
Domestic
begining of Electricity acceleration PLN
Notes : - Production realization 2006 (32 PKP2B = 162 M ton, KP- PTBA = 9.2 M ton, 130 local KP = 22 M ton); - Production Increase at 2006 due to production capacity increase of PKP2B 10 M ton ( PT Adaro Indonesia, PT KPC and PT Indominco Mandiri) and production increase of local KP 12 M ton; - 2007-2010 acceleration of generating coal Powerplant 10.000 MW - Government Reg No.5/2005 about National Energy Policy, 2025, coal domestic market for 33% of production27
CONDITION OF MINING COMPANY IN INDONESIA - 2006PU.KK PKP2B
EKS.
SK.
KONTR
EKT.
TERM.
JUMLAH
2 1PU.
19 21EKS.
6 24EKT. A/J.
2 6
12 28O/M.
194 61TERM.
235 141JUMLAH
KP
50
299
433
85
8
1186
2061
PU = General Survey; EKS. = Exploration; SK = FS; KONT. = Construction; EKT. = Exploitation/Production; TERM. = Termination; KK = COW Generation 1 7 (1967 1998); PKP2B= Coal Contract, Generation 1 3 (1981 2000);
KP = Mining License coal and mineral A/J = Transportation and sales; O/M = Processing and refining;
28
MINERAL AND COAL INVESTMENTCoal and Mineral Investment Statistic1,200.00 1,000.00 in US $ m illion 800.00 600.00 400.00 200.00 0.00 Mineral dan Batubara 2004 980.03 2005 880.40 Year29
2006 1,125.91
29
STATE INCOME FROM MINING SECTOR
Source: Ministery of Energy and Mineral Resources Indonesia - 2010
4
NEW MINING LAW (UU MINERBA)
31
Basic Principles in the New Mining Lawl
Mining activities will be grouped into: mineral mining and coal mining Mineral mining will be grouped into: radio active mining, metal mining, non metal mining and rock mining Clarification of Central Government, Provincial and District Authority Establishing of Mining Zone; Mining Estate Establishing State Reserve for the special national interest. There are only mining license and mining special license, and mining agreement. There will be no more direct contract between company and government Foreign mining company may have an agreement with the State Owned Mining Company/Representative Agency to develop state 32 reserve
l
l
l
l
l
l
Basic Principles in the New Mining LawLicense will be issued through tender mechanism based on equality and transparency Licensing system will be simplified and grouped into two: exploration license (general survey, exploration and FS) and operation license (construction, mining, processing, transportation and marketing) Puts more attention to environmental protection (reclamation) and post mining Puts more attention to the community development aspects The Existing of License Authority and Agreement will be honored vs 2-5 years transitional period (Commission VII DPR?) Processing and refining have to be conducted in Indonesia A clear sanction to mining players who violate the law33
POLICY ON COAL AND MINERAL DEVELOPMENT IN INDONESIA (1)To develop optimum economic benefit through optimization of production and income To provide much needed conducive climate for investment To create optimum value added for the development of extractive and energy industries To strengthen capability of local people as well as to promote technological development for Indonesian (clean coal technology, coal gasification, coal liquefaction, exploration technology, processing technology, etc)34
POLICY ON COAL AND MINERAL DEVELOPMENT IN INDONESIA (2)To respect contract sanctity To promote good mining practices To promote good corporate governance To enhance the domestic utilization of mineral and coal To strengthen community-based development program with more synergistic cooperation among the government, private sector and local people35
5
CONDITIONS AND ACTUAL CHALLENGES OF INDONESIA MINING INDUSTRY
36
ACTUAL CHALLENGESLaw uncertainty and business operation Overlapping of mining area with forestry area (Law 41/1999) Regional autonomy: duplication and contradictions between central and regional government regulations;, etc Taxation issues (tax incentives, VAT on gold and coal, corporate tax rate) Regional demand on the equality of income between central and regional and reattribution which is not stipulated in the contract Illegal mining Paradigm shift to triple bottom line A more stringent environmental standard Unfairness in divestment of foreign interests and mine closures. Implementation of Good Mining Practice.
37 37
CONCEPT OF SUSTAINABLE MINING IN INDONESIA
Mining commodity is transformed into human resources development and sustainable economic potential People living in the vicinity of mining area must get benefit from the existence of the mining Sustainable mining should be based on 3 pillars: economic, social and environmental sustainability
38 38
6
Conclusion
39
Conclusion of Indonesia Mining Industry 2010 Indonesia is still abundant with mineral reserves and holds a promising geological potential. Improvement on the Indonesia mining business condition must be done immediately by all stakeholders. Mining activities must be conducted based on the principle of Good Corporate Governance and Good Mining Practice which is founded on triple bottom line approach Socialisation of a positive Indonesian mining industry image.40
REFERENCE1. Bambang Setiawan 2. Dedy Aditya Sumanagara 3. Fraser Institute 4. Irwandy Arif 5. Price WaterhouseCoopers 6. Purnomo Yusgiantoro 7. Simon Sembiring 8. Darwin Zahedy Saleh41
Thank You