Mining firms will be required to process ore into metal in Indonesia

Mining firms operating in Indonesia will be required to process their ore in smelters located in the country under the Mineral and Coal Resources Law which is now in the final phase of deliberations at the House of Representatives.

Director general of mineral, coal and geothermal resources at the Ministry of Energy and Mineral Resources Simon Sembiring said on Wednesday that the government and the House had reached agreement on many crucial articles of the bill, including the one that requires mining firms to refine their mineral ore into metal in the country?s smelters.

The smelters may belong to the mining firms or others, he said.

?We will thus give chances for private sectors to build smelters in the country with materials from non-integrated mining firms. Certainly, mining firms are allowed to build an integrated operation, in which they mine mineral ore and refine the ore into metal at their own smelters,? Simon said.

Most of the country?s mineral miners have built their own smelters to process their ore into metal, but some companies, such as PT Freeport Indonesia, send some of their ore or concentrate to foreign smelters to be processed into metal.

Simon said once the mineral and coal resources bill is passed into law, all mining companies have to comply with the new regulation and ore or concentrate exports are thus considered illegal. The government will however give time for existing miners to fulfill their current ore or concentrate sale contracts with foreign smelters before enforcing the law on them. Miners who sign contracts after the enactment of the law have to comply with the new rule once they start operation.

Simon said he is optimistic that the deliberation of the bill will be concluded in March this year. (Godang)