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apan is allegedly considering to seek settlement with Indonesia at the World Trade Organization (WTO) over the latter'€™s export ban on raw ore, according to Japanese business daily Nikkei on Thursday.

'€œBringing the issue to the WTO is one of our options, but we have not made any decisions,'€ said Osamu Onodera, Japanese Ministry of Economy, Trade and Industry (METI) director on WTO compliance and dispute settlement, as quoted by Reuters.

The Japanese government would ask for consultations with Indonesia at the WTO later this month, Nikkei reported, and would request panel be formed to examine the case if the consultations collapsed.

Japan is dependent on Indonesian nickel, which accounts for 44 percent of its total needs.

Although Japanese smelters can survive off their stockpiles, reserves may not last long and they will need Indonesia to exclude Japan '€” home to some of the biggest stainless steel producers in the world '€” from its raw ore export ban.

President Susilo Bambang Yudhoyono'€™s special staffer for economic affairs, Firmanzah, said the State Palace had no knowledge of the issue.

'€œThe raw ore export ban is mandated by the 2009 Mining Law, so we must be consistent and adhere to it,'€ he said, declining to comment further.

Effendi Simbolon, a member of House of Representatives Commission VII overseeing energy and mineral resources, said it would be '€œirrelevant'€ for Japan to raise the export ban at the WTO.

'€œThe government shouldn'€™t be worried. [The Mining Law] is a regulation valid in our country, and we have the right to manage assets within our territory,'€ he said.

Aria Bima, deputy chairman of House Commission VI overseeing trade, said it was every country'€™s right to regulate its own domestic affairs, including those related to exports, through law.

However, Indonesian Employer Association (Apindo) deputy chairman Franky Sibarani said it was Japan'€™s right to bring the issue to the WTO.

'€œThe government must work hard to convince the rest of the world [of the benefits carried in the Mining Law], so that later it won'€™t have to revise or withdraw the law, because that would be embarrassing,'€ he said.

The ban is intended to add value to mineral exports and develop downstream industry by forcing local processing.

The ban, which went into force on Jan. 12 this year, is mandated by the 2009 Mining Law, which
stipulates that mineral ore must be processed at smelters in Indonesia before being exported.

Two American mining giants, Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp., have fought the ban tooth and nail, saying hefty export duties imposed on half-processed minerals contradicted their contracts of work (CoW), which protect against taxes, duties or fees imposed by the government that are not included in the initial contracts. (dwa)