New regulation proposed to relax mineral export ban policy

The government is considering to issue a new government regulation in lieu of the law as a legal basis to ease the current mineral export ban policy, instead of revising Government Regulation No 1/2014, Kontan reported on Wednesday.

The paper quoted a source as saying that Minister of Energy and Mineral Resources Ignasius Jonan has objected to the initial plan of using the revised GR No 1/2014 as the legal basis in relaxing the mineral export ban policy because the revised regulation is considered as legally weak and contradicts the existing 2009 Mining Law. As such, the revised GR No 1/2014 can be easily subject to a judicial review.

The revision of GR No 1/2014 was proposed by then acting minister of energy and mineral resources Luhut Panjaitan. The revision process has now reached its final stage.

The previous government issued the mineral export ban policy in early 2014, banning the export of mineral ores in a bid to generate greater value from the country?s mineral commodities by pushing miners to build domestic smelters. But under the GR No 1/2014, the export of mineral concentrates are still allowed until January 2017 in the hope that miners such as PT Freeport Indonesia would already have completed the required domestic smelter. But as progress of the domestic smelter projects remain at snail?s pace, the current government plans to relax the export ban policy, by allowing the export of mineral concentrates for another 3-5 years.

Under the planned revision of GR No 1, miners will be allowed to continue export of mineral concentrates after January 2017 but their mining contracts will have to be switched to IUP mining business permit, and that they must pay hefty export duty of up to 20 percent. (*)