Indonesia’s new President Joko ‘Jokowi’ Widodo.
MINING equipment, technology and services (METS) companies across the Asia-Pacific region can rest assured that with a change in Indonesia’s president there will still be plenty of opportunities for those looking to invest in or set up business in Indonesia, according to an Austrade spokesman from Indonesia.
Austrade Jakarta business development manager Ady Delnov told The Asia Miner during the International Mining and Resources Conference (IMARC) in Melbourne that the industry believes new President Joko ‘Jokowi’ Widodo will make a positive change to Indonesia’s mining regulation within the next six months.
“Mining contributes 12% of Indonesia’s GDP and is very important for the Indonesian economy,” he said. “We are anticipating Jokowi will create some kind of system that will some way, somehow replace the loss caused by the impacts that the current regulation are having on the industry.”
Jokowi, the 53-year-old former governor of Jakarta, had a narrow victory over ex-general Prabowo Subianto in this year’s election, marking the first time in Indonesia’s history that a president was elected from outside the military and political elite. “This is the time for us to unite our hearts and hands, this is the time for us … to reach and realize an Indonesia that has political sovereignty, economic independence and cultural character,” Jokowi said in his inaugural speech.
Ady Delnov says he expects industry to react positively as the international market sees the new president as more of a business person than his opponent.
“Many of the Asian mining equipment supply countries like Taiwan, Korea and Japan are saying they will pull back from Indonesia, but from a local perspective I’m not going to believe that will be the case or that will happen, because at the end of the day the CFOs of those companies will decide whether or not the net benefit of mining, operating in Indonesia, will still be worth the risk,” he said. “So, by calculation it should be decided by the CFOs, and I’m sure that they’re calculations are still telling them to stay put in Indonesia no matter what happens.”
The future for Australian METS companies operating in Indonesia also looks strong and Ady Delnov anticipates an improvement in the types of METS companies operating there. “We are seeing the transition between equipment companies into more technology and services companies, because on the equipment side the market is being bombarded by Korean and Taiwanese companies.
“Indonesia is the number one destination for Australian METS companies in terms of geography, and in terms of appetite. Australian METS companies might have some curiousness, or maybe some doubt about the Indonesian mining future but I don’t see that translated into action that would make them pull back from the Indonesian market,” he added.