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mid the prolonged battle between the government and big miners over a policy to ban the export of raw mineral ore, two smaller miners have agreed to ship their raw ore overseas despite having to pay hefty export taxes.

The director general of mineral and coal at the Energy and Mineral Resources Ministry, R. Sukhyar, said on Friday that PT Sebuku Iron Lateritic Ore and PT Lumbung Mineral Sentosa had shipped their concentrates overseas last week.

'€œSebuku shipped two vessels, while Lumbung one vessel. They pay the export taxes,'€ Sukhyar said.

According to Sukhyar, Sebuku had shipped a total of 100,000 tons of iron concentrate, while Lumbung, a lead and zinc miner, had exported 8,000 tons of concentrate.

To be able to export the concentrate, the two companies had paid export taxes amounting to 20 percent of their respective shipment values calculated based on a benchmark price set by the government, technically known as HPE.

The export taxes have been put in place since Jan. 12 this year. The government has imposed the taxes as it moves to ease the ban on mineral ore exports.

By paying the tax, companies can continue selling their semi-finished minerals overseas until 2017.

'€œIt seems that Sebuku and Lumbung have no other option than to export. They can no longer wait for another ease in export barriers,'€ Sukhyar said.

The export taxes are aimed at discouraging miners from exporting their raw commodities. Raw ore are expected to be processed in domestic facilities before being exported to create added value.

Taxes for iron, manganese, lead, zinc, ilmenite and titanium are set at an average of 20 percent, while those for copper concentrate are set at 25 percent.

Under the regulation, the taxes will be gradually raised to up to 60 percent by 2016.

The implementation of the hefty export duties has been strongly opposed by big miners.

PT Freeport Indonesia and PT Newmont Nusa Tenggara, whose combined production contributed 97 percent of total concentrate output in the country, have criticized the regulation and are seeking a lower percentage in return for their commitment to establish smelters in the country.

Following the opposition, the government has planned to provide '€œincentives'€ by cutting export taxes to 7.5 percent for companies with a strong commitment to building the smelters.

However, in a recent development, the newly installed Coordinating Economic Minister Chairul Tanjung decided to halt the incentive provision, pending the completion of contract renegotiations between the government and mining firms.

Newmont Nusa Tenggara, a subsidiary of US-based Newmont Mining Corporation, recently terminated production as its stockpiling facilities were full.

It has refused to export its products by paying the 25 percent tax. Instead, it recently opted to file an international arbitration against the government over the policy.