ASEAN Trying To Attract Foreign Investment

Revising outdated laws

Southeast Asian countries are rushing to revise outdated laws to attract much-needed foreign investment in the resources sector amid booming demand for metals by East Asian neighbors, industry officials said June 4.

ASEAN Federation of Mining Associations president Benjamin Philip Romualdez of the Philippines said "geography is key" as these countries try to take advantage of record-high metal prices driven by rising demand in Asian neighbors China, India, Japan and South Korea. Due to shipping costs, ASEAN countries are "best placed to serve the mineral needs of their hungry neighbors," he said on the eve of an Asia mining conference.

Arief Siregar, chairman of the Indonesian Mining Association, said the Indonesian parliament is working with industry experts to draft a new mining law to replace one that was enacted 40 years ago. The proposed law would seek to change the existing regime where mining firms seeking to do business in Indonesia would have to enter into a contract with the Indonesian government. The new law would also fix the tax system for minerals and require the mining operator to process the ore to at least the "intermediate" product stage, Siregar added.

Malaysia meanwhile is "seriously looking at a master plan" to revitalize its industry, which now accounts for just one percent of the country's gross domestic product, said Muhamad Nor Muhamad, executive director of the Malaysian Chamber of Mines.

Chadap Padmasuta, chairman of the Thai Mining Industry Council, urged foreign investors to "have a look" at opportunities in Thailand, especially in the western Kanchanaburi region near Myanmar. The country's northeast also has the potential for "the third largest potash mine in the world," he added.

The first gold and copper mines to operate in Laos since that country allowed its first ever minerals potential survey in 1993 started modest production in 2003, said Somphavan Inthavong, chairman of the Lao Mining Association. "We need more foreign direct investment," he added.

Romualdez said the ASEAN mining association had targeted annual mining export revenues of $15 billion by 2010, a figure that Siregar said Indonesia had already surpassed last year when its industry posted revenues of $16 billion , up from $11.07 billion in 2005.

Romualdez said some $700 million has poured into the Philippines resources sector in the past three years. He said he expects fresh investments of between $400 and $500 million this year, including an announced expansion by Japan's Sumitomo Metals of its nickel operations in the western island of Palawan.

Copyright Agence France-Presse, 2007

TAGS: Trade
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