Ministry delays penalty for miners failing to make significant smelter progress

Petromindo|Lucky

The Ministry of Energy and Mineral Resources has delayed the issuance of a new ministerial regulation on the proposed financial penalty mineral mining companies which have failed to meet construction progress target of their smelter projects, Kontan reported on Friday.

The paper quoted the ministry?s Director General of Mineral and Coal Bambang Gatot Ariyono as saying the proposed regulation is still being discussed with various related stakeholders. He expected it to be issued in March of next year at the soonest.

Bambang said in November that the ministry was set to soon issue the new regulation including a proposed financial penalty worth around 10 percent of the realized mineral export value of the miners.

He said that mineral mining companies which have obtained permit to export mineral concentrates, low grade nickel ores and washed bauxite, or anode slime must make significant progress in the construction of the promised smelters. He said that the construction progress of the smelter project must reach at least 90 percent of the target set under their respective six-month plan.

The government in January introduced new regulations allowing mineral mining firms to resume export of mineral concentrates, low grade nickel ores and washed bauxite, and anode slime for a five-year period on certain conditions including putting in place serious commitment to develop domestic smelters. The government will evaluate the promised smelter projects every six months, and those failing to meet the six-month target will risk their export permit revoked. The government is not planning additional sanction in the form of financial penalty. Miners failing to pay the penalty may risk their mining permits revoked. (*)