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After June slump, Indonesia govt issues more export permits

Publication Date : 05-08-2012

 

The government of Indonesia has issued permits to 55 mining companies to export mineral ore out of a total 78 registered export miners in accordance with a May regulation, which requires companies to obtain export permits for ore sales, a top official has said.

The trade ministry’s director general of foreign trade, Deddy Saleh, told reporters in Jakarta on Friday that since the government introduced its regulation on mineral exports in May, the trade minister had issued 55 permits for companies to sell mineral ore overseas.

“Of the 55 companies who have obtained export permits, 32 are nickel miners, 10 are bauxite miners, six are iron ore miners, four are zircon miners, two are copper mining firms, and one mines marble,” he said.

As of early July, the number of approved firms stood at 22, Reuters reported.

“This data shows us that out of the hundreds of mining companies in the country, only a few of them have been granted permits to export their products,” Deddy added.

Last week, the Trade Ministry reported an 80 per cent month-on-month decline in nickel ore exports in June to 572,106 tonnes, down from 2.85 million tonnes in May.

Copper ore and concentrate exports also fell in June to 20,000 tons, down 90 per cent from 193,941 in May.

The disruption to Indonesian exports is estimated to be costing the mining industry up to US$164 million a month in lost sales of nickel and bauxite, and has led to mass layoffs across the country, according to Reuters.

Earlier this year, the government issued two ministerial regulations to impose a 20 per cent export tax on 14 mineral commodities if they were exported in the form of metal ore. The 14 commodities are antimony, bauxite, chromium, copper, gold, iron ore, iron sand, lead, manganese, molybdenum, nickel, platinum, silver and tin.

Through the planned trade ministry regulation, all holders of the mining permits, locally known as IUP, needed to submit a recommendation letter from the energy and mineral resources ministry before being able to export metal ore, he continued.

Recommendations will only be granted if the companies fulfill certain requirements, namely their IUP status must be clean and clear (by following all legal procedures as stipulated in the 2009 Minerals and Coal Law); they must have paid all their tax and non-tax financial obligations; and they must submit a comprehensive proposal on whether they want to build their own smelteries, establish a consortium with other companies to jointly build smelteries, or sell their raw materials to smelting companies in the country.

Separately, Trade Minister Gita Wirjawan said in Jakarta on Friday that since the regulation came into force in May, more than 100 proposals had been received from mining companies to build smelting plants.

“Before the regulation was introduced, there were no more than 12 companies who had proposed to build smelteries,” he said.

 

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