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ocal mining firms are aiming to develop smelters that they can use to process raw mineral ores following a 2012 energy and mineral resources Ministerial Regulation on mineral processing.

Zulhanar Usman, secretary-general of the newly established Association of Miners in Regions (ASPPERDA), whose members currently comprise 10 small domestic mining firms, said on Monday that the association would propose the idea of shared smelters to the government to help mining firms process raw mineral ores.

The idea, he said, would allow small miners who did not have the financial capability to build a smelter, to collaborate with bigger firms that had the ability to build one, or to share one smelter with other firms.

'A company with no smelter may sell its raw products to one that has a smelter to process raw ores,' he said, adding he supported the government's program to strengthen the upstream mining industry despite the fact that foreign buyers preferred buying raw ores as opposed to processed ones.

The regulation, which is an auxiliary of the 2009 Mining Law, restricts the export of raw mineral ores by demanding mining firms to obtain a clean and clear status from the ministry to be able to export them.

The regulation aims to make mining firms establish smelters and export processed minerals to give added-value to Indonesian mining products.

ASPPERDA deputy chairman for external communications Yugi P. Hadiputranto said building smelters was so costly that most small mining firms with a mining permit (IUP) from regents could not afford to build them. He said the association planned to discuss possible financing schemes with banks.

'We expect banks to give us loans, not only 10 percent of the cost but more,' he said.

ASPPERDA was established in March to cater to the interests of mining firms in dealing with regency and provincial administrations as well as the central government, especially on issues related to overlapping regulations. (koi)