Realization Of Foreign Investment In Indonesia As of July - September 2011

The future of the industry and mining in Indonesia increasingly bright. This is based on reports the Investment Coordinating Board (BKPM), which indicates that the realization of foreign investment that most large placing mines as the second after the transportation, warehouse and telecommunications that is 900 million U.S. dollars.

Investment Coordinating Board through Lubis Azhar announced the realization of foreign investment in the third quarter (July-September 2011) increased 15.7 percent from Rp.40, 1 Billion in 2010 to Rp.46,4 trillion this year.

Business sectors received the most foreign investment absorption is transportation, warehouse and telecommunications. Value of 1.1 billion U.S. dollars or equivalent Rp.9, 7 trillion. While the mining sector received investments uptake of 0.9 billion U.S. dollars.

In addition to these sectors, investors also showed interest to invest in basic metal industries, metal goods, machinery and electronics. Value reached 0.6 billion U.S. dollars. Investment Foreign Investment was much absorbed in the Jakarta area that is 1.4 billion U.S. dollars, West Java, amounting to 1 billion U.S. dollars, Batam 0.8 billion U.S dollars, Papua 0.4 billion U.S. dollars and Bali 0.3 billion US dollars.

As for foreign investors interested in investing in Indonesia, is still dominated by large countries such as Singapore with an investment of 1.3 billion U.S. dollars, USA with 0.5 billion U.S. dollars, the Netherlands by 0.4 billion U.S. dollars, South Korea 0 , 4 billion US dollars and Japan by 0.4 billion U.S. dollars.

After Prohibited Export Of Raw Materials in 2014, The Energy And Processing Industry Investment in Indonesia More Promising

Energy sector and processing industry will be a promising investment options in Indonesia. These estimates associated with the Indonesian government's policy of prohibiting the export of raw materials began in 2014.

Given this prohibition will be effective starting in 2014, then the investment will be much in demand by investors is expected in the field of energy and raw materials processing industries (raw material) product processing industry, especially mining.
This prohibition policies have an impact on the reduction of exports in the form of raw materials such as bauxite, raw coal and others. To perform the export of mining products, it must first be processed in the origin country. This is consistent explanation deputy of Investment Coordination Board Of Indonesia (BKPM), M.Azhar Lubis in Jakarta (20/10/11).

According to Azhar, with the inclusion of manufacturing investment, it is necessary to an adequate energy supply. Investment in electricity infrastructure will be interesting because the mining industry will require lots of processing power supplies are stable and continuous. Without the support of adequate electricity then the mining processing industries will not run properly. Because of that, three years ahead will certainly provide a lot of investors in the field of electricity who are interested to invest their capital.
Azhar predict there will be a tendency to invest in the processing sector which previously only took from natural resources towards the export of processed goods. And he said again, when the year 2014 is targeted for entry into the export raw materials ban from now on should have started to be built industrial processing of raw materials such as palm oil and mining so that when it had reached in 2014 is expected to have completed the processing industry has been built and ready to use.

The policy bans export of raw materials in 2014 will invite many investors to invest in processing and electricity. This will directly have a positive impact for the region downstream of the development areas outside Java. Because it must be recognized that most raw materials for mining and other natural resources in outside areas such as Bali island of Java, Sulawesi, Kalimantan and Papua. Thus, development of processing industry should be built outside the island of Java in order to reduce production costs. In addition, the natural conditions on the island of Java is more narrow and requires critical areas to look for alternative development and the development of processing industry and the most realistic option is the outer area of ​​the island of Java.
In addition to inviting many investors to invest in the field of processing industry, this prohibition policy will trigger a lot of job opportunities in the manufacturing sector is almost certainly due to the processing industry requires much labor. This will indirectly impact on the reduction of unemployment in Indonesia generally and in particular the lower regions. Living quality of human resources must be improved in order to compete and acceptable to the labor market.

Global Economic Crisis Make The Coal Exporters of Indonesia Anxious

The turmoil in global economic crisis has not abated. Business actors coal began to fret for the worst.Chairman of Indonesian Coal Mining Association (APBI), Bob Kamandanu, said it continues to examine the influence of the current crisis in the USA and Europe on the economy of China is the largest coal export market Indonesia. 
"We know, the USA and Europe is China's main export market of China. So, if the crisis in the USA and Europe deteriorates then Chinese exports will be threatened and the Chinese economy will slow, "Bob said in Jakarta last weekend. 
According to Bob, is currently awaiting entrepreneurs crucial moment in November, because that's when negotiating coal contracts for 2012 will be conducted. "In negotiating contracts, it will be known how great OPPORTUNITY coal markets in China and whether the current global economic crisis made in china coal market decline", he said. 
Even so, says Bob, one of which is quite comforting fact is that during this coal from Indonesia exported more to China for the needs of power generation and home industry and not for large industrial plants so that if Europe and the USA economic crisis worsens and the economy China experienced its effects, the most affected sectors are the major industries in China for export purposes. 
Because of this, Bob continued again, this time his side (APBI) has not set up special measures to anticipate the threat of disruption of coal exports to China. "To date, contracts were still being met.Coal prices also tend to be stable and stagnant at USD 120 per tonne. So demand is still relatively stable, "says Bob. 
Ministry of Energy and Mineral Resources (ESDM) noted, currently 75 percent of the total Indonesian coal production is for export mainly to the destination country China, Japan, Taiwan, South Korea, India and Europe. 
In the past five years, Indonesia's coal production increased 16 percent per year. Majority of coal production is produced by mining companies operating in South Sumatra, South Kalimantan, East Kalimantan and central Kalimantan. Indonesia currently has the resources to 105 billion tonnes of coal outside the reserve of 21 billion tons. 

Indonesian Coal Price Regulation, Who Get The Benefits?

Coal product from Indonesia has a high price hikes in recent days. Price increases to 6 percent, forcing the coal miners company back to renegoitate who had signed a production contract. Although this is a badly hit for the buyers, but this price correction should be made to secure the production cost of the miners. 

High demand from the largest importer of Indonesian coal as China and India trigger an increase in coal prices at the local level. This forced the government to set a new price benchmark. Last September, the government of Indonesia made the benchmark price to reduce price disparity between large mines with small mines. For example, coal with GCV 63-61 calories, the benchmark price of government-issued ranging from $ 106 - $ 110 per metric ton. Whereas in the field, there are still miners who have and are willing to sell their coal at price of $ US90-$ US95 per metric ton. This is very detrimental to small miners because of the taxes they will paying is same as the big miners for the same product and quantity. Price regulation issued by the government, a little amount will help the small miners and small exporters. But, on the other, there are still coal trading company who will not renew their contract with the miners. Thus,they are who get most benefits from this government price regulation. In this case, Indonesian government must set the maximum profit margins that can be taken by the company's coal trader in order to reduce price disparity between the miners and coal trading company. The goal is clear, that this high price bullish could be beneficial to both-miners and trader companys .

In October ,price still hikes, demand from coal importer still high. I think regulation price in September 2011 will have been using in October 2011.

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