Indonesia Extends Permission for Exports of Some Raw Minerals

Indonesian government is set to extend permission for overseas shipments of some raw minerals for the next year, despite the looming export ban, the country’s Energy and Mineral Resources Minister Arifin told the parliament on Wednesday. Southeast Asia’s biggest economy had planned to ban exports of all metal ore starting in June to push investment in the domestic processing industry, which prompted companies to rush to complete smelters. But copper, iron ore, lead, zinc and anode mud from copper concentrates will be allowed to leave the country until May next year so smelters, many of which were delayed by the pandemic, would be ready to handle the materials, said Arifin.

He said banning exports prematurely would cost the country revenue and jobs.

Companies will be allowed to keep exporting metal ores if they pay export duties and if their smelters are at least half finished as of January. But they will be fined for every month of delay.

The government has said it would exempt copper miners Freeport Indonesia and Amman Mineral Nusa Tenggara from the ban as their smelter development was also disrupted by the pandemic.

However, bauxite shipments will be stopped in June as planned, Arifin said, since four existing smelters can absorb ores intended for export.

“By optimizing the processing at these four smelters there would still be an additional export value of $1.9 billion … so the government would still get a net benefit,” he said.

Arifin also noted that out of eight bauxite processing plants currently being built, seven were found to be “just open fields” despite progress companies saying they were up to 66% complete. Indonesian Bauxite and Iron Ore Companies Association said these projects had seen little progress because of difficulty finding funds, including from state-controlled banks.

Indonesia in 2020 banned exports of nickel ore, rattling global markets. But the policy resulted in massive inflows of smelter investment and helped boost the value of exports from Southeast Asia’s largest economy.

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