Mining exports from Indonesia come to a halt

January 24, 2014

Metal ore and concentrate exports from Indonesia have come to a complete halt, two weeks after the government placed on ban on shipments.
Government officials announced that halt on Jan. 23.

The export ban was introduced as a way to force companies to build processing plants in Indonesia (ME, Jan. 13, 2014).

Last-minute amendments aimed to ease the impact of the export ban on miners like Freeport-McMoRan Copper & Gold and Newmont Mining Corp . were put in place, however, they now face a progressive export tax on concentrates.

"There has been no concentrate export since January 12," Bachrul Chairi, director general of foreign trade at the trade ministry told Reuters. "As of now, no miners or companies have requested export approval for concentrate or processed ore from the trade ministry."

Freeport Indonesia and Newmont are in talks with the government over the new rules and are yet to resume exports since the new tax was introduced, while the Mineral Entrepreneurs Association has filed a legal challenge against the ore export ban, Reuters reported.

Under the new regulation, concentrate exports are allowed to continue for some minerals, including copper, lead, iron ore, zinc and manganese, though with different purity rules attached. Concentrates are an intermediate product between ore and metal, enriched with minerals as a result of processing.

"There is still no export for any kind of concentrates so far," added Sukhyar, director general of coal mines and minerals at the energy and mines ministry. "Maybe in the middle of this year some of them can be exported."

The surprise and last-minute inclusion of an escalating export tax on metal concentrates appears to have forced all other miners to stop shipments.

Under the new rules the export tax for concentrates of lead, iron, zinc, ilmenite, titanium and manganese is 20 percent for 2014, but will rise to 60 percent by the second half of 2016.



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