Minister cancels plan to lift export ban on bauxite ores

Interim Minister of Energy and Mineral Resources Luhut Panjaitan said on Wednesday that the government has decided that the export ban on bauxite ores will remain in place to help ensure the country obtain greater value from the commodity.

Earlier on Tuesday, Luhut told reporters the government has also decided to back down from an earlier plan of allowing the export low grade nickel ores after learning that domestic smelters can process the ores into greater value products.

?There are now large and small smelters (at home), it?s certain will not relax the export ban on nickel and bauxite,? he said on Wednesday.

Secretary General of the ministry, Teguh Pamuji said last week that the government was considering to allow the export of bauxite ores given the limited capacity of domestic smelters.

The government is currently finalizing a revision of Government Regulation No 1/2014, which would allow mineral ore concentrates such copper concentrates produced by giants including PT Freeport Indonesia and PT Newmont Nusa Tenggara to be exported for the next five years. Under the current GR No 1, mineral concentrates can no longer be exported after January 12, 2017.

The previous government introduced a ban on the export of mineral ores including nickel in early 2014, but allowed the export of mineral concentrates until January 2017, by which time companies such as PT Freeport and PT Newmont were expected to have already completed the required domestic smelter. However, construction of the required smelters have yet to be completed, thus the need to revise GR No 1/2014. The current government expects the smelters to be completed in three to five years.

Luhut warned Wednesday that the government will impose a progressive export duty on mineral ores or concentrates, which will rise every year to help push miners to complete the required smelters. (*)