JAKARTA: Indonesia is considering allowing some exports of minerals ores such as bauxite and nickel under certain conditions, the country’s mining and energy minister said on Friday. Energy and Mineral Resources Ignasius Jonan said in an interview that a government regulation was being amended in a bid to cushion the impact of a ban on exports of ore that was implemented two years ago. Jonan said: “We are realistic about this issue and that’s why we are making an amendment on the existing government regulation that hopefully will be released, or will be approved by the president soon, perhaps early January next year.”
Indonesia announced in 2014 an ore shipments ban to push miners to build smelters to process ore locally, but gave some concessions after protests from the industry. The full ban is supposed to kick in on Jan. 12. Traders have been closely watching the situation given Indonesia is a major producer of metals such as copper and nickel.
The minister said that in the case of bauxite and nickel if there were insufficient smelters yet to process all the ore the government would consider allowing some exports. “If the domestic smelter capacity for nickel and bauxite are not sufficient, we might consider to allow the rest of the production for exports mainly for the low grade,” he said. Miners such as state-controlled PT Aneka Tambang Tbk (Antam) have pushed for the government to allow some exports. Antam has said it may not have the cash flow for downstream investments worth at least $500 million if the ban on nickel ore exports is not eased.
Although other miners say any resumption of shipments could undermine metal prices and hurt investments that had already been put into processing plants. Indonesia’s coordinating minister for economic affairs said this week that the export of copper concentrates would be allowed beyond January 2017, if miners met certain conditions. Miners who currently have contracts of work must get a special mining license to continue exporting concentrates, Darmin Nasution told reporters. Apart from that, they must also pay export taxes and build smelters within five years, Nasution said.
