Indonesia’s mining quota U-turn risks raising operational costs and hurting investment: analysts

[JAKARTA] Indonesia’s plan to shorten the validity of mining output quotas from three years to one year could heighten regulatory uncertainty, increase operational costs and discourage long-term investment, analysts warned, even as the government said that the measure will help control supply and stabilise prices.

“Transitioning from a three-year to a one-year period will heighten regulatory uncertainty for miners,” noted Amelia Haines, commodities analyst at BMI. “Annual quotas will require companies to engage with regulatory authorities more frequently, potentially lengthening permitting timelines and diverting resources to compliance activities.”

The Indonesian government will press ahead with implementing the policy in October, despite opposition from players in the mining industry.