AP3I: RI set to lose $12b investment if govt eases mineral ores export ban
Monday, March 7 2016 - 04:03 AM WIB
Indonesia is set to lose a combined US$12 billion worth of new investment in domestic smelter projects if the government proceeds with its plan to relax the current mineral ores export ban policy.
This was said by Jonathan Handojo, Deputy Chairman of the Indonesia Refinery and Smelter Companies Association (AP3I), in reaction to a plan by the Ministry of Energy and Mineral Resources to include a relaxation of the current mineral ores export ban policy in the upcoming revision of the 2009 Mining Law.
?Almost all of the investment comes from overseas,? Handojo said, pointing out that the foreign investors would cancel their investment in domestic smelter projects as relaxation of the export ban is seen as a policy inconsistency.
The previous administration introduced in early 2014 the export ban policy, encouraging mining firms to develop domestic smelters in a bid to generate greater value from mining commodities as mandated by the 2009 Mining Law. But some officials have recently stated that many companies are facing difficulties in realizing the smelter projects amid the current drop in commodity prices and other problems. An official at the ministry said late last month that one of the points in the proposed revision of the mining law is a relaxation of the mineral export ban policy to accommodate demand from some miners.
According to Jonathan, of the 24 smelter projects of the association?s members, 20 are nearly completed and 4 have been stalled due to difficulties in obtain raw material.
He added that the planned relaxation would further undermine raw material supply for domestic smelters as miners would export their ores.
He said that the association has met with the National Industry and Economic Committee (KEIN) to formulate a new proposal, and plans to meet with President Joko Widodo in the second week of this month in a bid to persuade the government drop the planned relaxation of the mineral ores export ban policy.
Editing by Reiner Simanjuntak