Mining Sector Far From Collapsing

The mining sector is believed to be able to successfully ride out the current economy crisis. The crisis could eventually be conditioned to bring further opportunities. Only professional mining would endure the hardships.

“The mining sector, of coal in particular, is far from collapsing. We even foresee lots of opportunities here,” said Jeffrey Mulyono optimistically. The gentleman who is the chairman of Indonesian Coal Mining Association (APBI in its Indonesian abbreviation) was among the speakers in an international seminar on the impacts of the global crisis to the national mining industry, organized by Majalah TAMBANG in Jakarta on 3 December 2008.

Investment in the coal mining sector is at present most prospective. In his opinion, only mining companies who run their business professionally would succeed in creating and catching the opportunities. He also warned, however, that companies should spend more wisely in the current unpredictable condition.

The current crisis, according to Mr. Mulyono, would be a natural selection for illegal miners alike. Prices of commodities would be easily exposed to corrections, therefore illegal mining practitioners would not survive and they would automatically be perished. He then raised the issues of strengthening the sector’s human resources and promoting of locally made products.

Another optimistic view was voiced out by Krishna Syarif, Financial Director of PT. Timah, Tbk., the world’s second largest tin producer after China’s Yunan Tin. He explained that even in the current economic situation, PT. Timah had secured its profit significantly. With the current international price at US$ 11,500 per ton, his company could roll its business healthily. “At the current exchange rate to the US dollar, our production costs are close to our expectation,” said the young executive, sharing his inspiring story to the seminar’s audience.

Mr. Syarif also noted that companies should always pay attention to consolidation efforts with national and local governments, as well as other stakeholders, in order to maintain a good control on production and export. He also raised up the issues of good mining practice to ensure effectivity and efficiency in the mining activities, as well as of efforts to eradicate illegal mining conducts.

He reminded the audience that the crisis will eventually come to an end. “Tin is a very prospective commodity, as it is much needed by strategic industries such as the electronic industry. I am sure of an improved global price of this commodity in the future,” said Mr. Syarif further, concluding his speech.

Another speaker of the seminar, Rudy Merukh of Merukh Enterprise, was also in an extra optimistic mood when explaining that the mining sector is fundamentally strong. He said that the sector would easily be able to ride out the current crisis.

The man who is also a director at PT Newmont Nusa Tenggara then shared his company’s success story, starting with its 35 years experience weathering the ups and downs in the mining business. In 1982, when gold’s price at the global market fell down, his company, currently owner of up to 500 mining concessions all over the country, included the trading of gold as a future commodity in futures markets in the UK and Australia.

Mr. Merukh stated that there is more to do than only concentrating on financing to overcome the impacts of the crisis. Other aspects to be put into consideration are cost, marketing and sales. For instance, added value should be boosted in terms of marketing.