Indonesia’s mining sector is expanding

Tremendous potential in bauma’s partner country
bauma is not only the leading international event for construction machinery, building material machines, construction vehicles and construction equipment – it is also the world’s biggest trade fair for mining machinery. The partner country chosen for the next edition of this trade show, which takes place from April 15 to 21, 2013 in Munich, is Indonesia. Thanks to its extensive raw material deposits, this country offer tremendous growth potential.

The present conditions are regarded as favorable for new ventures. As part of the general economic upturn in Asia, demand is rising for mineral raw materials, and this in turn is boosting activity in mining. As a result the requirement for mining machinery and technology is also increasing. bauma is an excellent meeting place for both investors in and companies from Indonesia.
The Indonesian mining companies need expertise, technology and capital and they are looking to engage in cooperations with foreign partners. Adam Pamma, a representative of the Association of Indonesian Professionals for Science, Technology and Enterprises (AIPSE) in Germany, comments: “The mining sector in Indonesia is expanding rapidly, driven by good prospects for profit and rising demand on the international market. German partners are expressly welcomed, yet so far they seem not to have explored in any great depth the opportunities this market offers them. Greater involvement would without doubt have good prospects of success.”
Indonesia’s raw material reserves are the sixth-largest in the world. According to the Ministry of Energy and Mineral Resources, the republic ranks fifth worldwide for tin reserves, seventh for copper, and 15th for coal. Overall investment in the Indonesian mining sector was around 3,187 million US dollars in 2010. Of that 764 million was in coal, 1,480 million on other mining activities, and 905 million on mining services. Market researchers Business Monitor International (BMI) predicts an average increase in investment of ten to eleven percent per year by 2014. The value of production is forecast to reach 123 billion US dollars by 2014.
Indonesia is already the world’s largest exporter of coal for power stations. Extraction is exclusively by open-cast mining. Currently the annual yield is 340 million tonnes, but this is expected to grow to around 500 million tonnes p.a. by 2020. This forecast is based on the increasing demand from Asian economies and the rising needs of electricity suppliers in Indonesia. In particular China and India are buying more and more coal. For example, the electricity company PT PLN currently consumes 40 million tonnes of coal per year, but this figure is expected to double by 2015.
Extensive investment is also lined up in metal mining. Indonesia is the world’s second-largest exporter of tin, and after China the second-largest producer of tin. State-owned PT Timah, the largest company in the tin industry, wants to invest around 100 million euros in equipment for exploration and extraction, in order to increase productivity. Also, the large ore deposits of nickel, copper, iron, bauxite, manganese, gold and silver offer promising opportunities for investment and cooperations. As well as expanding extraction volumes, Indonesia is also planning to increase its processing capacity, in order to generate as much added value as possible in the country.
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Source: Bauma News Room