Govt to impose levy on iron ore export

Ministry of Industry is mulling to impose tax on iron ore export to guarantee supply to state-owned steel maker PT.Krakatau Steel, which is seeking to expand operations to iron-ore-rich South Kalimantan, a senior government official was quoted by Bisnis Indonesia daily as saying.

Ministry?s Director General of Metal, Machinary and Textile Ansari Bukhari said that the export levy would discourage miners to export ore and would be willing to provide supply to Krakatau Steel.

He said the rate for export tax was still under study.

Most iron ore mines are located in South Kalimantan province and the licenses for the mines were issued by local regents, making it difficult for central government to impose control.

According to Ansari, Indonesia currently exports 400,000 tonnes of iron ore per annum.

Government is currently planning to make South Kalimantan as Indonesian steel center as the province is rich in iron ore deposit as well as coal. Minister of Industry Fahmi Idris has said that Indian steel giants such as Tata, Ispat and Essar Group had expressed interest to build steel plant in South Kalimantan during VP Jusuf Kalla?s recent visit to India.(*)