The outlook for Indonesia’s mining sector remains stable despite stringent regulations that are likely to become more onerous in future, driving up the cost of business, ratings agency Standard & Poor’s said on Thursday.
“The high economic importance of the mining sector to Indonesia’s central and regional governments provides a strong incentive for the government to adopt reasonable regulations that do not materially dent the sector’s performance or its attractiveness to investors,” said Standard & Poor’s credit analyst Xavier Jean.
“Standard & Poor’s Ratings Services believes that while mining regulations will become more onerous in Indonesia, the government is unlikely to carry out some of its more extreme regulations,” the agency said in a press release.
S&P is likely to release a report soon on the Indonesian government’s sovereign rating. Fitch and Moody’s agency upgraded Southeast Asia’s largest economy to investment status in recent months.