Mining to Indonesia

(Last updated: 24 Jun 2008)

Trends and opportunities

The market

There has been very little new foreign mining investment in Indonesia, especially for hard rock mining, in the last 10 years. The new mining law is yet to pass the Indonesian parliament and this may not happen before the 2009 national elections. If the new law is successful in providing regulatory clarity and security of tenure from exploration to exploitation, then significant mining investment is anticipated to follow. There have been no new contract of works issued under the old system since 1998. All new projects undertaken by foreign mining companies in the last 10 years have been under contract of works issued pre-1998.

Opportunities

In line with the global resources boom Indonesia's existing mining sector is in full production and where possible mines are undergoing expansion within the framework of their existing contract of works.

There are significant opportunities for the supply of Australian mining equipment, consumables, technology and services to these existing mines and these opportunities include:

• pumps
• crushers and associated mineral processing equipment
• production equipment including drag lines, drilling equipment, excavator buckets and other ground engaging tools
• drilling services
• software
• materials handling systems
• a wide range of spare parts
• consumables including chemicals, wear plates and explosives
• coal washeries
• contract mining (mainly for coal) and other mining services

Competitive environment

Australia’s major competitors in the oil and gas sector are USA, Europe (British, French and Spanish), Japan and China. The other minor competitors are from Malaysia, Thailand and Indonesia.

The largest producer of oil in Indonesia is Caltex, which produced around half of Indonesia’s crude and condensate output. Other major companies include Repsol YPF (9 per cent), TotalFina&Elf (5.5 per cent), BP-Amoco (4.7 per cent), Conoco (4.3 per cent), and Unocal (4.2 per cent).

Tariffs, regulations and customs

One of the benefits available to mineral developers in Indonesia is the use of the ‘master list’ facility. This allows an investor to import capital goods (ie. machinery, equipment spare parts) at reduced rates of import duty and Value Added Tax (VAT). This facility is widely used in the mining and oil and gas industry. With the exception of products imported under ‘master list’ facilities, most imported mining products attract tariffs ranging between 0–40 per cent plus VAT, while imported products on oil production equipment attract tariffs ranging between 10–25 per cent plus VAT.

The master list is submitted for approval to the Indonesian Investment Coordinating Board. Approvals can be extended for various reasons including expansion of existing mining activities.

Industry standards

International standards are adopted by the Indonesian oil and gas industry from the American Petroleum Institute and the American Society of Mechanical Engineers. Most major mining operators in Indonesia are multinationals and these companies generally conform to international standards. However, occasionally a standard of the home country is applied because of an initial preference for equipment from that source.

Marketing your products and services

Market entry

Austrade Jakarta will again be holding OZMINE #3 in February 24-25, 2009. This is a two day exhibition of Australian mining capability and a one day mining conference with both events being organised and run by Austrade.

At OZMINE 2008, 53 Australian mining equipment, technology, consumables and service companies participated and in 2009 it's anticipated this figure will reach 100 exhibitors. The cost of participation in OZMINE 2009 is $1,250 per company and the package includes the following:

• 3x3 stand
• Inclusion in the Australian exhibitor directory
• Attendance at the Indonesian mining conference
• A networking cocktail reception
• A BBQ party for the close of the event

For information on opportunities in the Indonesian mining sector or to participate in OZMINE 2009 please contact either of the following people:

Craig Senger                
Trade Commissioner Jakarta
Australian Trade Commission (Austrade)
Australian Embassy Level 3
Jl.HR.Rasuna Said Kav C/15-16
Jakarta 12940 Indonesia
Tel: +62 21 2550 5347
Fax: +62 21 2550 5350
Email: craig.senger@austrade.gov.au

Hendra Purba
Business Development Manager - Mining
Australian Trade Commission (Austrade)
Australian Embassy Level 3
Jl.HR.Rasuna Said Kav C/15-16
Jakarta 12940 Indonesia
Tel: +62 21 2550 5323
Fax: +62 21 2550 5350
Email: Hendra.Purba@austrade.gov.au

Links and industry contacts

Mining-related resources

Petromindo – www.petromindo.com

Indonesian Mining Association (IMA)
Jalan Prof Dr Supomo SH, No. 10
Jakarta 12870
Indonesia
Tel: (62 21) 830 3632  or 828 0763
Fax: (62 21) 830 3632

Association of Indonesian Mining Professionals (PERHAPI)
Jl. Tegal Parang Utara No.12
Jakarta 12790
Tel: (62 21) 7918 1714 or 7918 1715
Fax: (62 21) 7918 1032

Indonesian Petroleum Association (IPA)
Wisma Kyoei Prince, 17^th Floor, Suite #1701
Jl Jend. Sudirman Kav 3
Jakarta 10220
Indonesia
P.O. 1275/JKP/10012
Tel: (62 21) 572 4284
Fax: (62 21) 572 4286

Ministry of Energy and Mineral Resources
Centre for Education and Training
Jalan Jendral Gatot Subroto, Kav 49
Jakarta 12950
Indonesia
Tel: (62 21) 525 4508
Fax: (62 21) 525 1380 

Ministry of Energy and Mineral Resources
Directorate General of Geology and Mineral Resources
Jalan Prof Dr Supomo SH, No. 10
Jakarta 12870
Indonesia
Tel: (62 21) 831 4585/4586
Fax: (62 21) 831 0775

Directorate General of Oil and Natural Gas (MIGAS)
Ministry of Energy and Mineral Resources
Jalan Abdul Muis No 6-8-10
Jakarta 10160
Indonesia
Tel: (62 21) 386 2136
Fax: (62 21) 386 2141

Indonesia State Gas Company (PGN)
Head Office: Jalan KH Zainul Arifin No 20
Jakarta 11140
Indonesia
Tel: (62 21) 633 4861 or 633 4848
Fax: (62 21) 633 3080

Indonesia State Oil and Gas Company (PERTAMINA)
Head Office: Jalan Merdeka Timur No 1-A
Jakarta 10110
Indonesia
Tel: (62 21) 381 5111 or 381 6111
Fax: (62 21) 384 3882 or 384 6865

LNG and LPG Projects – PERTAMINA
Patrajasa Building 15^th Floor
Jalan Gatot Subroto Kav 32-34
Jakarta 12930
Indonesia
Tel: (62 21) 520 1626
Fax: (62 21) 520 1678 or 520 1638

Processing and Refining Projects – PERTAMINA
Patrajasa Building 15^th Floor
Jalan Gatot SubrotoKav 23-24
Jakarta 12030
Indonesia
Tel: (62 21) 525 0084
Fax: (62 21) 520 1678

Government, business and trade resources for Indonesia

Directorate General Customs and Excise - Indonesia – www.beacukai.go.id
Indobiz – www.indobiz.com
CIA World Factbook – www.cia.gov/cia/publications/factbook/geos/id.html
IndoExchange–  www.IndoExchange.com
TradeIndonesia.com – www.tradeindonesia.com
Indonesian Yellow Pages – www.yellowpages.co.id

Service providers

PT Citra Buana Masindo (AJM Resources Publishing and Gold Group Asia/Pacific Pty Ltd)
Gedung Masindo
Jl. Cikajang No.56, Kebayoran Baru
Jakarta 12170
Indonesia
Tel: (62 21) 723 3444
Fax: (62 21) 723 3555
Email: info@masindo.com

AAJ Associates/RSM International (Bird Cameron)
Samudera Indonesia Building 3 and 3 A Floor
Jalan Letjen S Parman Kav 35
Jakarta 11480
Indonesia
Tel: (62 21) 530 7889
Fax: (62 21) 566 3569
Email: aaj@aaj.co.id

PT Taylor Nelson Sofres Indonesia (Frank Small and Associates)
Menara Thamrin Suite 1401
Jl MH Thamrin Kav 3
Jakarta 10250
Indonesia
Tel: (62 21) 230 2788
Fax: (62 21) 230 2794
Email: jakarta.office@id.tnsofres.com

PT Data Consult Inc.
Jalan Pulomas Raya No. 31
Jakarta
Indonesia
Tel: (62 21) 475 3226 or 475 3302
Fax: (62 21) 475 3227

Financial

Jakarta Stock Exchange – www.jsx.co.id
Surabaya Stock Exchange – www.bes.co.id
Wright Investors' Service – http://profiles.wisi.com/profiles/Indonesia.htm

Australian resources

The Department of Foreign Affairs and Trade (DFAT) - www.dfat.gov.au/geo/indonesia/index.html