Export ban in Indonesia goes into effect

January 13, 2014

A ban on exporting a range of raw mineral ores from Indonesia went into effect on Jan. 12 along with a last-minute presidential regulation and would allow 66 companies, including Freeport-McMoRan Copper & Gold and Newmont Mining, to continue to export copper, iron ore and zinc concentrates.

The ban was put in place to force companies to build processing plants in Indonesia and includes unprocessed nickel, bauxite, tin, chromium, gold and silver exports. However, confusion about the policy remained on Jan. 13 as Freeport-McMoRan announced that it was still awaiting government approval to export copper concentrate from its huge copper mine in Indonesia, Reuters reported.

President Susilo Bambang Yudhoyono had offered some relief on the export ban, but halted $2 billion worth of nickel and bauxite exports, Reuters reported. The last-minute regulation significantly lowered the minimum processing requirements for copper, manganese, lead, zinc and iron ore to be defined as concentrates.

Government officials said 66 companies are being allowed to continue to export “processed mineral” because they have provided assurances to the government that they will soon build the necessary smelters.

“Nickel, bauxite, chromium, gold, silver and tin are required to be fully processed before export. It’s no longer negotiable,” R, Sukhyar, director general of coal and minerals at the Energy and Resources Ministry told the Jakarta Post. “Copper concentrate and intermediary products such as iron ores, manganese, zinc and lead can be exported.”

The 2017 deadline to build smelters which was originally proposed by the Energy and Mineral Resources Ministry is gone in the president’s new regulation. Sukhyar told the news media, “There’s no time limit any longer. However, we will control exports and impose duties, which will be progressive. As taxes rise, we expect unprocessed ores will no longer be economical for export and miners will start to process them.”

However, more than 100 mining companies have been forced to reduce or shutdown operations.

Rear Adm. Agus Heryana, commander of Naval Main Base Region IV, said his command was increasing patrols to prevent mineral ore from being shipped offshore.


Related article search: