Govt may ban iron ore export

Government may move to ban iron ore export this year in a bid to secure feed to domestic steel industry which is now on expansion mode, a government official said on Friday.

Currently, a number of steel producer has been planning to invest in steel plant, including state-owned Krakatau Steel, which plan to build another steel mill in South Kalimantan, Australia?s Bluescope and India?s Essar; they all need iron ore as raw material, Ansari Bukhari, Director General of Metal Industry at The Minsitry of Industry was quoted by Kontan Daily as saying.

The move to ban iron ore export, he said, was meant to force miners to tie up with steel mills and also to encourage miners to process their products into pellet and billet which has far greater value than ore. Miners would still be allowed to export iron ore that has been processed into pellet or billet, he said.

Almost all of producing iron ore mines are located in South Kalimantan and operating under mining license (KP) that are issued by regional governments. Most of the ore are exported to China.

There is no official data from the Ministry of Energy and Mineral Resources about iron ore production. Bukhari said one South Kalimantan producer PT.Silo, has exported 1.4 million tonnes of ore in 2006. (*)