Indonesia to allow exports of five raw minerals despite June ban
INDONESIA will allow shipments of some raw minerals to continue despite an export ban that is set to start in June, the mining minister told parliament on Wednesday (May 24).
The resource-rich country had planned to ban exports of all metal ore to encourage investment in the domestic processing industry.
But exports of copper, iron ore, lead, zinc and anode mud from copper concentrates will be allowed until smelters – many of which were delayed by the pandemic – are ready to handle the materials, said Energy and Mineral Resources Minister Arifin Tasrif.
He said banning shipments of these materials prematurely would cost the country revenue and jobs.
Companies will be allowed to continue exporting as long as their smelters reached 50 per cent completion as at January, Arifin said, and they will be required to pay export duties.
Jakarta has said it would exempt copper miners Freeport Indonesia and Amman Mineral Nusa Tenggara from the ban, as their smelter development was also delayed by the pandemic.
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However, bauxite shipments will be stopped in June, Arifin said, since four existing smelters can absorb ores intended for export.
“By optimising the processing at these four smelters, there would still be an additional export value of US$1.9 billion… so the government would still get a net benefit,” he said.
But Ronald Sulistyanto, chairman of Indonesian Bauxite and Iron Ore Companies Association, said there are only two operating bauxite plants in the country.
“We produce 30 million tonnes, where would this output go? If this cannot be absorbed, many would lose their jobs,” he said. Each smelter producing alumina from bauxite can only handle around 6 million tonnes of ore.
Arifin also noted that out of eight bauxite processing plants currently being built, seven were found to be “just open fields” despite progress companies saying they were up to 66 per cent complete.
Ronald said these projects had seen little progress due to difficulty in securing financing, including from state-controlled banks that still see them as risky.
Indonesia in 2020 banned exports of nickel ore, rattling global markets. But the ban resulted in massive inflows of smelter investment and helped boost the value of exports from South-east Asia’s largest economy. REUTERS
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