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Govt adamant about raw mineral export ban
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A worker monitors the mineral flotation process to produce copper, gold and silver concentrates at one of PT Freeport Indonesia's facilities. (Kompas/B. Josie Susilo Hardianto)
D
espite slow progress on the construction of new smelters due to weak commodity markets, the government insists it will not relax rules that prohibit the export of raw minerals in 2017.
"We are still referring to the 2009 law [on mineral and coal mining]. As long as it is not revised, the policy will still be implemented as stated in the law," Energy and Mineral Resources Minister Sudirman Said explained in Jakarta on Thursday.
Low commodity prices are giving mining companies headaches about their cash flow and hampering their ability to invest in the construction of smelters. Processing facilities will be needed if companies wish to continue exporting in 2017.
However, the government has refused to extend the deadline again.
According to the law, unprocessed exports are no longer permitted five years after the law entered force in 2009. However, due to the price decline in global commodity markets that hit the industry, mineral exporters were unable to meet the deadline.
President Susilo Bambang Yudhoyono’s administration then issued government and ministerial regulations in 2014 extending the deadline to 2017 for companies with a demonstrated commitment to establish processing facilities.
Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan Perkasa Roeslani asked the government to relax the law, pointing out that the weak commodity markets had hampered mining companies’ financial performance.
"Smelters are not cheap. We need to give them [businessmen] time to negotiate," he said.
However, Sudirman refuted that argument on the grounds that several companies had managed to finish their smelters despite the harsh market environment. "There are those who have finished constructing; if the government relaxes the rules, it will cause negative effects. We will consult with the House of Representatives on the current condition," he explained. (ags)
