Coal output up but most metals down in Indonesia in 2008

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Indonesia, which has a globally significant mining sector, reports coal output rising in 2008, but most metals output fell due to low metals prices and technical problems at Freeport's Grasberg mine.

Posted:  Tuesday , 30 Dec 2008

JAKARTA (Reuters) - 

Indonesia's output of coal rose slightly this year, but production of other key commodities including copper and tin fell, the energy and mines minister said on Tuesday, amid a recent downturn in commodity prices.

Indonesia has some of the world's largest deposits of gold, nickel, tin, coal and copper, with several leading international mining firms, including Freeport-McMoran Copper&Gold (FCX.N), operating in the country.

Coal output in 2008 is estimated at 225 million tonnes, up just 3.7 percent from 217 million tonnes in 2007, the energy ministry said.

But copper output fell 27 percent to an estimated 580,950 tonne this year, from 797,400 tonnes last year.

"The decline in copper output was due to a production problem at Freeport," said Bambang Gatot Ariyono, director of mineral and coal enterprises at the energy ministry.

Tin output fell 13 percent to 79,210 tonnes this year, from 91,280 tonnes in 2007, while nickel-in-matte output fell 4.8 percent to 74,160 tonnes this year, from 77,930 tonnes in 2007.

Ariyono said overall investment in the mining sector rose to $1.6 billion in 2008, from $1.2 billion in 2007.

Indonesia's parliament passed a new law this month on coal and mining that promises more certainty for investors although it has stirred concern it may deter major new foreign investment.

Government officials expect the new law to boost revenue from the mining sector as Jakarta is keen to gain greater control of its natural resources. (Reporting by Muklis Ali; Writing by Aloysius Bhui; Editing by Sara Webb)