In order to develop Indonesia's downstream industries, the country is planning to introduce various restrictions in its mining sector from 2014 onwards (as stipulated in the 2009 Mining Law). These restrictions - having nationalist tendencies - include the ban of raw mineral ores exports and the limitation of foreign ownership in Indonesian mining companies. The latter, particularly, is not well received by foreign investors as it reduces profit margins, while investments in the developing stages are high.

Indonesia's decentralization policy, which started after Suharto's authoritarian New Order regime collapsed in 1998, had a severe negative impact on Indonesia's mining sector as regional governments lacked the quality and skills to structure their mining administration properly. Mining permits were granted on a large scale and without much oversight, resulting in chaotic conditions. Moreover, the country's current regulatory framework lacks cohesion between various government departments.

The Fraser Institute is a Canadian-based public policy research and educational organization.