Miners planning to build smelters required to make deposit

Miners planning to build domestic smelters will be required to make deposit at local banks to prove their seriousness, top government officials said.

Speaking at an event Thursday to promote the government?s recent mineral ore export ban policy to regional leaders, Vice Minister of Energy and Mineral Resources Susilo Siswoutomo said that the deposit will be part of the requirements, in addition to paying export tax, for miners to be able to export mineral concentrates.

He said that the new requirement will be included in the planned revision of Minister of Energy and Mineral Regulation No 1/2014.

The minister issued the regulation on January 11, along with Government Regulation No 1/2014 to implement the long-planned export ban on mineral ores as mandated by the 2009 Mining Law.

But under the watered down export ban policy, six so-called mineral concentrates including copper, which meet the minium purity requirements, can still be sold overseas until 2017, by which time the miners are expected to already built the necessary domestic smelters.

The six mineral concentrates are subject to progressive export tax, starting 20 percent this year, and rising gradually to 6 percent in 2016.

Director General of Coal and Mineral R. Sukhyar said that required deposit is estimated to be around 5 percent of the investment value of building the smelter. The deposit will be returned to the miners once the smelter has been completed, hopefully in 2017.

President Director of smelting company PT Indosmelt protested the deposit requirement as it would cost the company, which is planning to build a smelter. Chairman of the Indonesian Nickel Association, Shelby Ihsan Hasan also questioned the deposit requirement. He was quoted by Kompas daily as saying that miners would need the money for investment.(*)