Two mining firms submit $12.3m in deposits for smelters

The government has received a total of US$12.3 million in deposits from mining companies Sebuku Iron Lateritic Ores and Lumbung Mineral Sentosa as guarantee of their commitment to build smelter facilities in Indonesia, in a move that would help resume export of mineral concentrates.

Sebuku Iron had submitted $12 million, while Lumbung Mineral placed $300,000, the Jakarta Globe quoted Thursday Director General of Mineral and Coal, R. Sukhyar as saying. The deposit is part of requirements set by the Ministry of Energy and Mineral Resources to obtain export recommendation letter, a necessary document to obtain export approval from the Ministry of Trade. Other requirements include plan to build domestic smelters, and paying export tax. But miners have complained about the punitive export, and are appealing to the Ministry of Finance for reduction of the tax.

The companies are following steps by mining giants Freeport Indonesia, the subsidiary of Phoenix-based Freeport-McMoran Copper& Gold, and Newmont Nusa Tenggara, the subsidiary of Newmont Mining.

Freeport Indonesia had deposited $115 million, while NNT had deposited $25 million last week, said Sukhyar.

Sukhyar said that the Energy Ministry will submit the recommendations to the Finance Ministry, in which the companies will be allowed to export their mineral concentrates, but with a export tax that decreases in line with their smelter development progress.

?So, now these four companies are still waiting for the decision on the export tax,? he said. (*)