Incentives planned for mining processing plants

The government plans to provide incentives to companies willing to build and operate processing facilities for mining products in Indonesia, Investor Daily reported on Friday.

The incentives are designed to lure investment in refinery industry within the mining sector. One of the incentives could be in the form of tax holiday.

Thamrin Sihite, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, said the government needed to come up with something that could make investors invest in building refining facilities. ?That?s why we well provide them with incentives,? he said on Thursday.

A ministerial decree is currently being drafted on the value added for mining products, as mandated by Law No.4 2009 regarding Mineral and Coal. Article 170 stipulates that all Contract of Work (KK) that have entered production phase must process their mining products here five years after the enactment of the law, or effective starting 2014.

Under the ministerial decree currently being drafted, Thamrin said, regulation for coal and mineral would be separated. ?It (the decree for mineral) will be finalized by the end of the year,? he said.

As for coal, Thamrin said the Ministry would try hard to complete the decree this year as well. At present, the planned regulation for the value added for coal is still being studied by the Association of Indonesian Mining Professionals (Perhapi).

This decree may ban export of coal with calorie below 5,700 kcal/kg. Thamrin however said that calorie level would not be the only factor considered in increasing the product?s value added.

?It?s not an export ban per se, but there has to be added value to the commodity, such as transportation services and domestic laboratories and so on,? he said. (*)