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Indonesian miners puzzled over ore exports
Publication Date : 26-08-2013
A recent statement from the country’s finance minister on the government’s plan to remove export quotas for unprocessed mineral ore has left mining companies confused ahead the 2014 export ban.
Rozik Soetjipto, the president director of Freeport Indonesia, said over the weekend the subsidiary of US-based Freeport McMoran Copper and Gold Inc. would study
Finance Minister Chatib Basri’s statement on the removal of export quotas.
“There are no official documents on the policy and thus we are still in the dark over the policy,” he said in a telephone interview.
The executive was asked for his comments on the recent statement from Chatib who said last week that, in order to overcome the current account deficit, the government would “relax” mineral commodities export until 2014.
Under the 2009 Mining Law, Indonesian mining companies should process their ore in domestic smelting plants starting in 2014.
Beginning that year, they are no longer allowed to export unprocessed ore.
The government began imposing export restrictions last year to prevent overexploitation ahead of the export ban.
Several supporting regulations to the 2009 Mining Law were formed last year, restricting exports of raw mineral ore by demanding mining firms to obtain a “clean and clear” status from the Energy and Mineral Resources Ministry to be able to export them.
Miners are considered ‘clean and clear’ if they show serious commitment to build a smelting plant and have no problems with their mining permits. In addition, miners are subject to 20 percent export tax.
Chatib said under the new regulation, the government would allow more unprocessed mineral ore exports by removing quotas while maintaining the current policy of 20 per cent export tax.
Commenting on this, Freeport’s Rozik said the giant gold and copper producer would wait until the government published the written documents on the latest policy.
“To be honest, I have only read [Chatib’s statements] in the media and there has not been any formal documents to explain the policy,” he said.
In unison, PT Newmont Nusa Tenggara president director Martiono Hadianto, who is also the chairman of the Indonesia Mining Association (IMA), said the he was still blurred by the government’s latest plan on metal ore shipments. “The absence of official documents may lead to misinterpretations,” he said.
Martiono, however, applauded the general idea introduced by Chatib, adding that allowing more export of metal ore would help the country’s trade deficit that has been lead into crisis recently.
Freeport and Newmont were among the giant miners that had expressed their opposition to the 2014 export ban and the requirements to build smelters, saying building smelting plants in the country “were not economically feasible”.
Freeport earlier this year said it might have to lay off hundreds of its workers at its mines in Papua should the government go ahead with the ban.
This week, however, Freeport Indonesia announced it would supply copper concentrates to two local smelting plants, scheduled to begin production in 2017, to comply with restrictions on unprocessed ore exports.