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oth praise and criticism showered the government’s plan to tax the export of minerals and base metals starting next year.

Economists say such an initiative is a testament to the government’s long-term economic vision, in which local manufacturers are encouraged to add value to commodities, as well as contributing to national energy security.

For local miners, on the other hand, the upcoming export tax would be an additional burden that could affect their financial performance amid global economic uncertainties that could jeopardize future expansion plans.

Arif Hadianto, a spokesperson for Indonesia’s fifth largest coal miner, PT Berau Coal Energy, said coal producers already paid 13.5 percent of their total sales as royalties to the government, on top of the income and value-added taxes.

“A new tax would automatically be a burden. The government must take into account that coal producers have an obligation to meet domestic demand,” Arif said on Sunday.

Separately, Resource Alam Indonesia head of investor relations Erif Tirtana said small- and medium-sized companies would be hurt most by the tax plan. “The export tax will be a double tax, as we are already paying royalties. I just hope that the ministry will consider our grievances,” he said.

PT Antam corporate secretary Bimo Budi Satriyo said that the export tax would reduce his company’s profits. Bimo said that Antam, which exports nickel to China, Korea, and Europe, had to give 5 percent off its sales prices per ton of high calorie (garnierite) nickel ore and 4 percent for every ton of low-calorie (limonite) nickel ore in royalty fees.

“We still don’t know what the regulation will look like. As long as the government considers the royalty we are already paying. It will be okay.”

Association of Indonesian Mining Professional chairman Irwandi Arif said that the government should calculate the amount of export tax to help companies maintain their profits. He said, the tax should be re-distributed to develop industry in the country.

“The export tax should be used to provide incentives in development of coal-powered power plants, for example, in Mulut Tambang [in Tanjung Enim, South Sumatra]. It would be troublesome if the government fails to synchronize the use of the tax,” Irwandi said.

The tax plan was first introduced last week by Industry Minister Mohamad S. Hidayat, who said that the ministry was preparing the export tax on mineral products to encourage the development of derivatives products from minerals and base metals by local industries.

Hidayat said the regulation was poised to be implemented in the first half of 2012, pending approval from the Finance Ministry.

“The growth of the downstream industry will create jobs, add value to our products and reduce dependence on imports,” said Hidayat. He promised that investors who invested in downstream industries would be given tax holidays.

The planned export tax is in line with the ongoing process carried out by the Energy and Mineral Resources Ministry, which is drafting a regulation that will ban exports of raw mining products beginning in 2014. Prohibiting exports of raw mining product is a part of the government’s commitment to fully implement the 2009 Mineral and Coal Law, requiring miners to process coal and mineral into added-value products before exporting them.

Mining expert Kurtubi said that the government’s move to impose export taxes on non-renewable coal and base metals was “logical” as other commodity-based industries were already paying more.

“State revenue from coal and general mining is very little. Corporate tax for general mining sector is about 35 to 40 percent, while the royalty as stated in the contract of work is only about 1 percent.”