Government mulls relaxing mineral ores export ban

By Thomas R. Sembiring

The government is evaluating a number of policy options to help revive and accelerate investment in the coal and mineral sector, including a possibility of lifting the current export ban on mineral ores to help cash-strapped miners raise export proceeds to finance the development of the required domestic smelters.

Director General for Coal Development and Management at the Directorate General of Mineral and Coal, Adhi Wibowo, said last week that new policies are expected to be issued in September including incentives for coal and mineral miners. He said that one example is to allow bauxite and nickel miners to resume export.

Bisnis Indonesia quoted Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Bambang Gatot Ariyono as saying Monday that various policy options are being finalized. ?Once the evaluation has been completed, the answer (to the question whether export ban will be lifted) can be a yes or no,? he said.

Bambang said that whatever policy options taken by the government, it must be able to resolve the stalled domestic smelter projects.

Head of the Indonesian Iron Ores and Bauxite Entrepreneurs Association, Erry Sofyan has repeatedly urged the government to relax the mineral ore export ban policy, allowing miners to export ores to raise cash to help finance costly smelter projects particularly as they no longer have revenue following the introduction of the export ban on ores early last year as mandated by the 2009 Mining Law, while banks have generally avoided loans to the industry.

Meanwhile, Jonatan Handojo of the Association of Indonesian Refining and Processing Companies, warned the government not to lift the export ban as it would cause difficulties for existing smelters to obtain the necessary raw materials. The association groups 21 companies which have completed domestic smelters.

Alexander Barus, Vice President Director of PT Bintang Delapan Mineral, whose subsidiary PT Sulawesi Mining Investment has spent US$2.3 billion in developing nickel smelter, has similar opinion. ?If the export ban is lifted, we?re dead,? he said.

Editing by Reiner Simanjuntak