Govt drafting incentives for downstream business

By Adianto P. Simamora

The government is drafting financial incentives for investors interested in developing downstream business in Indonesia to support the plan to increase of added-value of mineral ores through refineries.

Coordinating Minister for Economy Hatta Radjasa said that one of options is to exclude downstream business from royalty which currently are valid for upstream sector of mining companies.

Hatta told reporters that the government was drafting road-map for development of downstream, locally known as hilirisasi as the ban on export of raw materials of mining products would take effect in 2014.

Trade Minister Gita Wirjawan told CoalAsia after the meeting at Hatta?s office that the government has in principal agreed to not require share divestment on the downstream business players on mining sector.

?We are committed to encourage investors to develop business in downstream sector to increase added-value of mineral ores. All (ministers attending the meeting) agree to not oblige share divestment on downstream business. It is one of the incentives,? he said, adding ?The Finance Ministry is assessing other incentives to encourage the development of downstream business.?

Editing by David Mustakim