Ministry decree on added value in mining sector to complete soon
Thursday, October 7 2010 - 03:14 AM WIB
Mineral and Coal Law No. 4/2009 calls for the development of smelters in the country to process and refine mining output as part of the efforts to add value of the national mining output. The law stipultes that mining companies will not be allowed to export ore starting 2014. Instead, they have to process and refine their products in local smelters.
?This law aims to deliver a message that the government is committed to promote downstream development;? he said at the 4th Added Value Mining Indonesia Conference, Workshop and Exhibition at the Ritz-Carton hotel in Jakarta.
Darwin said the ministry was preparing a ministerial decree to accelerate downstream development in the mining sector. The decree is expected to be issued in November this year, he said.
The government would be assisted by a working group from the Association of Indonesian Mining Professionals (Perhapi), the organizer of the two-day conference, in formulating strategies for downstream development, Darwin said.
The government vowed to give more incentives for investors committed to build ore smelters in the country, he said. ?The mining sector is one of the main contributors to Indonesia?s economy. If we can add value to our mining products, we can give greater benefits to our people,? Darwin said.
Other key points of Darwin's speech during the conference are as follows:
1. Preparing the regulatory framework
"This is very important and primary, since efforts to increase added value would require a substantial investment. The effective regulation should motivate investors to invest more in processing and refining business. As a relatively new business and pioneer in the mining industry, smelting and refining industry would become the main attraction for investors to invest their funds, if they find the regulation supportive. To that end, the government is in the process of issuing ministerial decree on mining industry added value that can be used by all stakeholders."
2. Guarantee on raw material supply
"Investment in processing and refining industry would require assurance of supply, 15 to 30 years, of raw material. This will relate to the continuity of production and its supervision and development and also for fulfilling mineral and coal domestic supply obligations. I believe that we can develop such strategy by strong cooperation between the government, private sector and community."
3. Technology selection
"Technology selection is important because it corresponds with efficiency and environmental impacts. Therefore technology selection should not only be based on costs aspect, but also consider efficient and environmentally friendly technology. Therefore, decision on effective and efficient technology for added value in mining products could be best determined through cooperation among research parties, mining development bureau, and association as the facilitators. Moreover, it requires roadmap for cooperation development between research agencies, mining development bureau, and association as the facilitators."
4. Integration of upstream and downstream industries
The industry integration will be important because the processing and refining operation are downstream industry supplier. Therefore, the market participants require demand and clear market to sell mineral and coal processed and refined products, so the processing and refining industry will be economically sustainable.
5. Human resource competence
Availability and ability of competent human resources is the main asset for the future, in order to fulfill the intention to develop value added industry. This would include not only the industry professionals, but also the government officials as the regulator, as well as public as the stakeholders. (denny)