Southeast Asian countries are rushing to revise outdated laws to attract much-needed foreign investment in the resources sector amid booming demand for metals by East Asian neighbors, industry officials said yesterday.
The Philippines made the first move three years ago when the Supreme Court upheld a law that would allow foreign investors to skirt constitutional equity limits in key sectors including mining.
Indonesia, Laos, Malaysia and Thailand, all fellow ASEAN members, were following suit, they said.
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 China, India, Japan and South Korea.
Because of shipping costs, ASEAN countries are "best placed to serve the mineral needs of their hungry neighbors," he told a news conference on the eve of an Asia mining conference in Manila.
Indonesian Mining Association chairman Arief Siregar said the Indonesian parliament was working with industry experts to draft a new mining law to replace one that was enacted 40 years ago.
He said no significant investment had been made in Indonesian mining except by those with existing operations since the fall of the Suharto government in 1998.
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 said.
Malaysia, meanwhile, was "seriously looking at a master plan" to revitalize its industry, which now accounts for just 1 percent of the country's GDP, 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 said.
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 targetted annual mining export revenues of US$15 billion by 2010, a figure that Siregar said Indonesia had already surpassed last year when its industry posted revenues of US$16 billion, up from US$11.07 billion in 2005.
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