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Smaller coal, nickel miners concerned over proposed omnibus bill incentives
Several fiscal and non-fiscal incentives in the reformatory omnibus law were aimed at helping miners build downstream industries.
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Several heavy equipment owned by PT Berau Coal are conducting coal mining activities at the East Kalimantan mine operation Binungan site. (JP/Indra Harsaputra )
C
oal and nickel miners have been speculating about several plans to develop downstream mining industries set out in the government’s proposed omnibus bill on job creation, despite having demonstrated a lukewarmth response to the initiative.
The miners, albeit supportive of Indonesia’s industrialization ambitions, are concerned over the scalability of these planned incentives, particularly for smaller mining companies, many of whom lack the financial muscles to build coal-fired power plants, coal gasification plants and nickel smelters, among other downstream mining facilities.
“We don’t have the equity to find a partner, so many smelter projects are stalled,” said Meidy Katrin, secretary general of the Indonesian Nickel Mining Association (APNI), whose members are small- and mid-sized miners.
The Coordinating Economic Ministry revealed on Jan. 22 that several fiscal and non-fiscal incentives in the reformatory omnibus law were aimed at helping miners build downstream industries. Aside from growing employment opportunities, industrialization is also meant to extract more bang for the buck from Indonesia’s mineral wealth.
Read also: Indonesia tightens grip on nickel and coal exports
If passed into law, the bill will amend more than 2,000 articles in dozens of prevailing laws in various sectors to ease doing business in the country, which recorded its slowest economic growth in more than two years in the third quarter.
The government is particularly eyeing coal and nickel miners, which are among Indonesia’s top global exports. The Energy and Mineral Resources Ministry has banned the export of nickel ore since January and will ban the export of other metal ores starting 2022.
