Indonesia, the world’s largest tin and nickel ore producer, will go through with its full ban on exports of unprocessed mineral ores slated to begin in 2014, despite a recently published Supreme Court verdict that called off a ministerial decree supporting the scheme
ndonesia, the world’s largest tin and nickel ore producer, will go through with its full ban on exports of unprocessed mineral ores slated to begin in 2014, despite a recently published Supreme Court verdict that called off a ministerial decree supporting the scheme.
The court finally published the verdict of a case filed by the Indonesian Nickel Association (ANI) that challenged the Energy and Mineral Resources Ministerial Decree No. 7/2012 on mineral processing, which was a supporting regulation of the 2009 Mining Law.
The verdict came down on Sept. 17 last year, but the court only recently published the legal document amid official procedures. The court ordered the government to lift four articles in the decree, including one that since May 6 of last year, limited the exports of 65 unprocessed mineral commodities.
Under the Mining Law, Indonesia would fully ban exports of raw mineral ores starting from 2014 as part of its policy to strengthen the country’s upstream mining industry. The ministerial decree was
formed last year to avoid over-exploitation of raw minerals as 2014 is approaching.
The decree, along with the Energy and Mineral Resources Ministerial Decree No. 11/2012, restricts exports of raw mineral ores by demanding mining firms to obtain a clean and clear status from the Energy and Mineral Resources Ministry to be able to export them.
By receiving the licenses, the miners have shown their commitment to building local smelters to process raw ores individually or by forming partnerships with other companies.
The Energy and Mineral Resources Ministry’s head of legal and public relations, Susyanto, told The Jakarta Post that despite the court’s ruling, the government would still carry on in 2014. “We will revise the decree so that our plan to increase the value of the downstream industry can still be achieved,” he said.
The Energy and Mineral Re-sources Ministerial Decree No. 11/2012 has actually revised the now-invalid decree by loosening export restrictions.
“We will continue to discuss drafting the new rule internally as well as communicating with the court,” he said.
Separately, local businesses have urged the government to implement the Supreme Court’s verdict in the near future.
ANI’s chairman, Shelby Ihsan Saleh, said on Thursday that in line with the court’s verdict, the ministry should not restrict exports to comply with the verdict. “Export bans and requirements for exports according to specific quotas should be void, according to the law. Revision to certain articles [of the decree] should also not be applied,” Shelby told reporters during a press conference in Jakarta.
Indonesian Chamber of Commerce and Industry (Kadin) chairman for industry, research and technology Bambang Sujagad demanded that once the ruling was implemented, the rights of the Energy and Mineral Resources Ministry to arrange exports should also be annihilated.
He added that the roles of related ministries, including the Finance Ministry and the Trade Ministry, which respectively impose an export tax of 20 percent on mineral exports and issue export permits, should also be revoked.
The implementation of the decree has roughly cost nickel mining companies Rp 6.5 trillion (US$676 million) in losses, which covers investment for infrastructure in mining areas and operational costs, according to Kadin’s estimate.
According to the government’s data, the export of nickel ores in 2012 reached 35 million tons, higher than the 33 million tons exported in 2011. The export figure in 2011 jumped significantly from the 8 million tons of nickel exported in 2010.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.