MEMR to ease requirements for export of mineral concentrates
Saturday, February 6 2016 - 03:33 AM WIB
The existing Ministerial Regulation No 11/2014 among others requires that mineral concentrates producers must be able to show progress in the development of domestic smelters to be able to obtain the necessary recommendation letter from the MEMR for obtaining the six-month export permit from the Ministry of Trade. The progress of the physical construction of the domestic smelter must be at least 60 percent of the six-monthly target.
Director of Mineral Development and Management at the ministry, M. Hidayat, however, acknowledged that the current drop in the prices of commodities have affected their financial conditions and smelter projects. As such, the ministry plans to revise the aforementioned regulation and ease the requirements.
He was quoted by Bisnis Indonesia as saying that the yard-stick use to measure the progress will have to be changed. He pointed out that if progress currently has been based on realized physical construction or spent investment, under the new yard-stick, contracts signed by the smelter owner such as engineering contract can be taken into account.
The planned revision to the ruling comes after gold and copper giant PT Freeport Indonesia failed to get recommendation from the ministry for an extension of its export permit, which expired on January 28, as progress of its smelter project in Gresik, East Java, had only reached 14 percent, compared to the 30 percent target.
The company has also failed to fulfill a new requirement set by Minister of Energy and Mineral Resources Sudirman Said for the company to make an additional deposit of US$530 million to show its seriousness in developing the smelter as its financial condition has been affected by the commodity downturn.
Hidayat, however, dismissed suggestion that the planned easing of mineral concentrates export is made to help PT Freeport renew its export permit. (*)