Boston, MA -- (ReleaseWire) -- 05/02/2014 -- A growing number of miners in Indonesia will be forced to put the brakes on investment as the economic slowdown in China continues to drag on mineral prices. Crucially, the export ban on raw minerals will have a decisive impact on the fortunes of Indonesia's mining industry. While no official announcement has been made, our core view remains that the export ban will eventually be rolled back due to mounting economic headwinds and practical consideration.
With the boom years in commodity prices behind us, we believe a growing number of miners in Indonesia will be forced to put the brakes on investment over the coming quarters. Despite boasting rich mineral reserves, Indonesia's mining sector is still very much in its infancy. The country is only a dominant miner in the production of a few minerals, namely, bauxite, coal, nickel and tin. In contrast to other countries such as Australia, Indonesia has failed to reap the benefits from the unparalleled growth of China over the past decade.
View Full Report Details and Table of Contents
While the stellar run in commodity prices has encouraged a wave of mining investment around the world, capital flows into Indonesia's mining space has been less impressive. The lack of a mature regulatory framework governing exploration and extraction has been a key concern for many investors. The enactment of the New Mining Law of 2009 has significantly discouraged foreign miners from entering the country. Under the new law, foreign investors are required to progressively divest their shareholding such that by the end of the sixth year of commercial production, Indonesian investors hold at least 20% of the total shareholding. This figure would gradually increase to 51% by the tenth year of commercial production.
Crucially, the export ban on raw minerals in 2014 would have a decisive impact on the fortunes of Indonesia's mining sector. In an effort to push the construction of smelters and boost the value of mineral exports, the Indonesian government ban the export of unprocessed minerals with effect from January 2014. However, we believe the export ban is one policy that will have to be rolled back over the coming quarters. With the exception of tin, the bulk of minerals such as copper, nickel and bauxite are still a long way from being refined domestically.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Materials research reports at Fast Market Research
You may also be interested in these related reports:
- Australia Mining Report Q2 2014
- Botswana Mining Report Q2 2014
- Peru Mining Report Q2 2014
- South Africa Mining Report Q2 2014
- Tanzania Mining Report Q2 2014
- India Mining Report Q2 2014
- Angola Mining Report Q2 2014
- Namibia Mining Report Q2 2014
- United States Mining Report Q2 2014
- Chile Mining Report Q2 2014