FRIDAY, March 29, 2024
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Indonesia may lift mineral export ban

Indonesia may lift mineral export ban

DRAFT REGULATION AIMS TO EXTEND CURRENT RELAXATION, EXPAND PRODUCTION LIST

  THE GOVERNMENT is drafting a regulation offering further relief in the export of raw and partly processed mineral products – a policy that, if passed, would again contravene the 2009 Mining Law |that requires a total ban on such exports.
Easing the policy will only benefit a few politically wired mining companies at the expense of others that have poured billions of US dollars into the construction of smelting plants to process the raw products for export.
A draft regulation prepared by the Energy and Mineral Resources Ministry, a copy of which was recently obtained by The Jakarta Post, will not only extend the current export relaxation on copper concentrate but also expand the product list.
Partly processed or raw nickel, bauxite, anode slime and copper telluride will be given the go-ahead for overseas shipment, while unprocessed gold, silver, tin and chromium will remain on the export ban list.
For companies to get a five-year export licence, the draft requires miners to pay an export tax and construct a smelter. 
The government will revoke the licence if the miners fail to show progress in smelter construction.
“The (relaxation) plan is still under discussion,” Deputy Energy Minister Arcandra Tahar told the Post recently.
“It is not yet final, but we expect to have it issued, hopefully, next week (this week).”
Energy Minister Ignasius Jonan refused to go into detail on the draft, saying only that the ministry was still discussing a new policy.
The government is rushing to decide whether to maintain the current relaxation or to fully enforce the ban, as mandated by the Mining Law, before the January 11 deadline.
The law stipulates that mineral ore miners must complete their smelters by 2014, when the export ban should have been fully put in place. 
The smelters are expected to bring in added value to the end products, as opposed to exporting ore in its raw form.
However, because none of the proposed smelters had been completed, the deadline was extended to 2017 by then-president Susilo Bambang Yudhoyono when he issued Government Regulation No 1/2014 as an amendment to Government Regulation No 23/2010 on the management of mineral and coal businesses.

Criticism 
If President Joko “Jokowi” Widodo maintains the relaxation, he will draw criticism similar to that raised in 2014 when Yudhoyono was accused of violating the law because a government regulation cannot overrule a law.
The alleged violation at the time did not spiral into further controversy, as the nation was occupied with legislative and presidential elections, and Yudhoyono handed over his presidency to Jokowi on October 20, 2014.
“The previous administration clearly violated the law. 
“We don’t expect the current one to do the same,” said House of Representatives legislator Satya Yudha of the Golkar Party, who is a member of Commission VII overseeing energy and mining.
“We warned the government in a recent hearing against continuing with the export relaxation. 
“If they want to extend it, the policy should be in the form of a government regulation in lieu of law, not through a government regulation,” he said.
Maintaining the relaxation has particularly benefited gold and copper miner Freeport Indonesia, a local unit of US mining giant Freeport McMoRan Inc, and copper producer Newmont Nusa Tenggara, which was recently taken over by local energy firm Medco Energi Internasional from US-based Newmont Mining Corp.
 

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