Indonesian Energy and Mines Advantage

With huge coal reserves, Indonesia is an obvious choice. Its proximity to India translates into lower freight charges for companies, making it the favorable destination. Indonesian Energy and Mines Ministry is targeting to attract $ 3.5 Billion investment in its mineral and coal sector.

Indonesia continues to be a significant player in the global mining industry with significant levels of production of coal, copper, gold, tin and nickel. In particular, Indonesia remains among the world’s largest exporters of thermal coal. Global mining companies consistently rank Indonesia highly in terms of coal and mineral prospects. Indonesia is an obvious choice because of its proximity to India which translates into lower freight charges for companies.

Its 61.3 Billion Tonnes of Coal resources, ready for taking up exploration activities, large internal market added with geographical advantage, Indonesia has a natural appeal for foreign investors. Indonesia is ranked as one of the countries with the highest potential for new mineral discoveries, and has attracted its fair share of investors. Huge interest has build up, with the introduction of the new Mining Law and some of the implementing regulations. Indonesia’s parliament has passed new economic laws and policies that promises an increasingly transparent and accountable political system.

Indonesian coal remains attractive: Indonesia’s coal industry continues to prosper and grow. Even as markets and prices diminishes in the short-term, regional and domestic coal demands provide a robust long-term outlook for Indonesian Coal producers. Indonesian increasing global coal market share.

This is well supported by the country’s relatively low cost structure, proximity to major Asian coal market, and ownership of key infrastructures. Further, the emergence of low rank coal as Indonesia’s incremental production going forward will be partially driven by low-rank coal. This is especially given the abundant low-rank coal reserves in South Sumatera amounting to (40% of Indonesian coal reserves).

Ports Infrastructure: Logistics and connectivity have become the buzz words to describe what Indonesia could be doing better to improve trade and competitiveness. Existing port capacity of 400 Million tonnes. Coal Terminal is proposed at East Kalimantan province, with an initial capacity of 40 Million tonnes a year and may further expand to 80 Million tonnes as demand increases. International markets have traditionally been the principal destination for Indonesian thermal coal, with more than 75% of country’s total thermal coal production being ex- ported. Major export markets includes China, India, Japan, Taiwan, South Korea. Indone- sian thermal coal markets have tripled over the last eight years.

Indonesian Regulatory framework: The Indonesian Government has approved the long awaited new mining law, Undang-Undang (UU) tentang Pertambangan Mineral dan Batubara (Minerba) Nomor 4/2009, which replaces the previous UU Nomor 11/1967, covering all minerals, metals and ores. Laws in Brief: The new Indonesian mining law includes the following: Mining and metal companies willing to undertake mining activities in Indonesia must now request a mining busi- ness license called an IUP (Izin Usaha Pertambangan).

Two types of IUPs available — one for exploration and one for production, which will both be issued by the regency, provincial or state governments. The IUP could possibly be granted through an auction or tendering process. The Indonesian Central Government will have the right to declare certain areas as State Reserve Areas. (Kaolin mining equipment)

Companies will be obliged to process all mined ore and minerals in Indonesia within a transitional period of five years. Mining companies will be subject to taxes (Penerimaan Negara) of 10% of total net profits, in addition to the 13.5% total production royalty (Penerimaan Negara Bukan Pajak — PNBP). This may be clarified or modified by future legislation and or/bylaws.
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Wonderful Indonesia | North Sumatra

Nort Sumatra | Sumatra Utara
Home to a diverse array of cultures and a fascinating kaleidescope of Indonesian life, the region of North Sumatra has many wonders to explore. North Sumatra’s specacular natural beauty spreads from the magnificent Lake Toba, the biggest lake in Southeast Asia, to the jungle of Bukit Lawang which organgutans make their home. The natural and cultural wonders here make this is a region to come and have a true adventure

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