Jakarta's New Mining Law Could Deter Foreign Investors


“Rules giving powers to local governments likely to deter investors.”

Indonesia's controversial new mining law, which gives greater power to local governments and forces mine operators to process raw materials locally, is likely to deter foreign investment at a time of falling global commodity prices, miners and industry analysts said.

The law, passed by Indonesia's parliament on Tuesday, comes after years of wrangling between the central government and provincial politicians over who should control the nation's abundant resources of coal, gold, nickel and copper.

In the past decade, foreign investors have made no major mining investments in Indonesia because of the regulatory limbo.

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