T

he Indonesian Chamber of Commerce and Industry (Kadin Indonesia) will set up a team to provide the government with input and recommendations particularly related to the raw mineral export ban, which will be implemented early next year.

The team will be headed by Garibaldi Thohir, the vice chairman of Kadin Indonesia, with team members including Didie Suwondho and Bob Kamandanu, fellow Kadin Indonesia vice chairman and the chairman of the Indonesian Coal Mining Association, respectively.

'€œPak Didie and Pak Bob will be involved intensively day-to-day. We will come up with a decision for practical implementation,'€ Garibaldi said in a press briefing after an international seminar entitled '€œThe Future of Indonesian Mining Industry-Key Challenges and Opportunities'€ on Tuesday.

Garibaldi said Kadin'€™s involvement in the government'€™s plan to ban the export of raw minerals did not just start on Tuesday.

'€œKadin and its sub-organizations have already provided input to the government. Now, the issue has become more pressing ahead of the implementation of the law in 2014,'€ Garibaldi said, adding that the team would have a follow-up meeting as early as next week.

The country is planning to fully implement the 2009 Mining Law, which stipulates that miners operating in Indonesia are required to process their ore domestically, meaning that they will not be allowed to export unprocessed ores.

The law is aimed at boosting the downstream industry.

The government last year started restricting raw mineral exports to prevent overexploitation ahead of the full implementation of the regulation.

Moreover, miners currently have to pay a 20 percent export tax for selling ore overseas.

Although the Mining Law was issued in 2009, only a few miners have built smelters or refineries to process the ores while a few others plan to build new ones. Meanwhile, most miners are reluctant to develop the processing facilities due to a lack of infrastructure and the need for huge investment.

As a result, the full implementation of the Mining Law is now being debated as most of the processing facilities are still not ready for the regulation, which is scheduled to be effective starting on Jan. 1, 2014.

It is likely that the government will loosen the ban on exports of raw materials.

Mining firms that launched smelting plant projects could be permitted to export unrefined mineral next year under several conditions.

Didie said his team would make recommendations on several issues, including criteria companies would have to fulfill to be exempt from the raw material export ban, the applicable transition period for the full implementation of the ban, cooperation among big companies to develop processing facilities and possible supervision for companies claiming the smelting plant projects.

'€œKadin agrees that Indonesia has to increase its volume of exports with some added value, as they are more lucrative. We firmly support the implementation of the Mining Law,'€ he said.

According to Didie, however, there must be a way out.

Didi said the government might continue to stop unprocessed mineral exports after Kadin submitted its recommendations.

'€œOf course, it may happen because the government is committed to implementing the Mining Law,'€ he said.

Uncertainty in the mining sector has resulted in the country being dubbed the worst among the 10-least attractive countries in the mining industry, according to a survey by the Canada-based Fraser Institute in 2012.