In October Austmine was excited to be part of Ozmine 2014, the leading event for Australian METS and mining companies operating, or looking to do business, in Indonesia and South East Asia. 2014 saw a revamp of the event after 8 years as Ozmine linked with M&E Indonesia and the ASEAN 10th Annual Asia Pacific Mining Conference, introducing a series of topical seminars forming an interesting 3-day conference.
The event focused on three of the hottest words in the mining industry right now - productivity, efficiency and innovation. More than 30 exhibitors joined the 3-day exhibition, which ran simultaneously with the conference days.
The conference program featured speakers from across South East Asia and Australia, including PT Vale Indonesia, Tigers Realm Group, PT ANTAM TbK, PT Newmont Nusa Tenggara, Cokal Limited and G-Resources and saw more than 200 people in attendance for most of the sessions.
This event is the key showcase event for Australian METS companies wishing to engage, or work even more closely with South East Asian mining operations. Austmine CEO Chris Gibbs Stewart, who was in attendance at the event and MC’d several sessions, noted: “Despite Australian METS being involved in the Indonesian mining industry for well over 100 years, the market here is still very under-developed. The writing is on the wall in terms of competitiveness and a strong focus on technology and innovation is just around the corner.”
About 62% of Australian METS currently export to SE Asia with New Zealand being the top export country for Australia. Indonesia comes in second, with 35% of Australian METS exporting to Indonesia. However, despite these high numbers, there are challenges with working with any overseas market.
The key issues in Indonesia are: Government restrictions/legislation; prevention of exporting raw materials; the law requiring that after 5 years from business start-up then 51% of your business must be divested to another organisation; and lack of enforceable legislation preventing illegal mining. There are approximately 1:4 legal v illegal mines in Indonesia!
Largely as an outcome of these issues, a mining investment slowdown has occurred, with only six exploration projects currently under way. Indonesia has an abundance of resources, including significant coal, gold, nickel and copper reserves.
More than 100 Australian METS companies are invested in the market, with the biggest competition coming from the USA and Canada. Australia's proximity, longevity in the market, and close economic and cultural ties with Indonesia mean it is typically the preferred supplier country.
Christine Gibbs Stewart shared some insights into opportunities in the market: “Indonesia might currently be faced by legislation challenges, but they also face the same challenges we have in Australian mining operations. They too are tasked with significantly improving productivity, so are actively looking for equipment or services that can help them with that.
“Safety is another big issue for them, as reflected by the 1000 worker strike at the Freeport-McMoran mine after a recent fatal incident, meaning safety equipment and services are another top priority.
“The recent change in government in Indonesia, which is now headed by President Joko Widodo, also heralds a wave of optimism for legislative change, although this is unlikely to be rapid.
“Vietnam is another opportunity for METS suppliers looking to export to the region. Vietnam is actively looking to Australia for mining equipment and services because of increasingly strained relations with the Chinese who have historically provided most of what the country required.” Austmine is finalizing an international mission to Vietnam and Cambodia with Austrade, scheduled for March 23-27, 2015.