Government to ease mineral export ban policy, renewal of mining contracts
Friday, December 23 2016 - 02:49 AM WIB
Petromindo
Minister of Energy and Mineral Resources Ignasius Jonan said the government will allow mining companies to file for an earlier request for renewal of their mining contracts, and to continue export of mineral concentrates next year.
On Thursday, Jonan and other economics ministers held a meeting to discuss the final revision of Government Regulation No 77/2014 and Government Regulation No 1/2014.
One of the key points of the revision of Government Regulation No 77/2014 is to allow mining companies, both coal and mineral, to apply for renewal of mining contracts five years prior to their expiry. The existing regulation stipulates that miners can only make request for extension of their mining contracts two years prior to their expiry. GR No 77/2014 is the third revision of GR No 23/2010.
Jonan said that under the revision of GR No 1/2014, mineral mining companies will be allowed to continue export of mineral concentrates as long as they meet certain requirements including changing their contract status from mining contract of work (also known as KK) into special mining business permit (also known as IUPK).
The current GR No 1/2014 stipulates that miners will no longer be allowed to export mineral concentrates starting January 13, 2017. The government in early 2014 introduced an export ban policy as mandated by the 2009 Mining Law to push miners to develop domestic smelters in a bid to generate greater value added from the country?s mineral commodities, but allowed miners such as gold and copper giant PT Freeport Indonesia to continue export of mineral concentrates to give them more time to build the required domestic smelters. However, PT Freeport and other miners have yet to complete the required smelters, prompting the government to relax the export ban policy. Officials previously said that the export of mineral concentrates will be allowed only for another three-five years, by which time they must complete the smelters, and will be subject to export duty.
Jonan, however, did not say the type of mineral concentrates that will be allowed for export next year. He also said that the two revised regulations will become effective once approved by President Joko Widodo.
Meanwhile, Coordinating Minister for Economic Affairs Darmin Nasution said that the government will review the progress of their planned smelter projects every year, and will impose sanction to miners failing to make the required progress.
PT Freeport, a local subsidiary of US-based giant Freeport McMoRan Copper & Gold Inc, has called on the government for the company to be allowed to make request for early extension of its mining contract, and continue export of mineral concentrates next year.
PT Freeport?s current contract is set to expire in 2021. The company needs early renewal of its mining contract as it plans to spend billions of dollars to finance smelter construction and undermine mining operation.
Editing by Reiner Simanjuntak