Indonesia to relax 2014 unprocessed mineral ore export ban

JAKARTA (Scrap Monster): Following government's recent policy to get rid of export quotas to halt the widening trade deficit, it plans to relax 2014 unprocessed mineral ore export ban.  Indonesia, preparing to ban raw- metal ore shipments from 2014 while compelling mining companies to build smelters, will probably allow some exports beyond that deadline to give more time for processing plants to be built.

“Mining firms that had launched smelting plant projects may be permitted to export unrefined minerals next year — but only under certain conditions.  Progressive export taxes, he said, would still be imposed on unprocessed mineral ore, although miners whose smelters were being constructed may be allowed to export larger volumes “, said Industry minister MS Hidayat.

Southeast Asia’s largest economy, where mining accounted for 12 percent of gross domestic product last year, is striving to boost the value of commodity shipments to support growth. The country may surpass Germany and the U.K. by 2030 to be the world’s seventh-largest economy, generating $1.8 trillion in annual sales for agriculture, consumer and energy companies by that year, McKinsey & Co. said in a report this week.

Under the 2009 Mining Law, miners operating in Indonesia must process their ore domestically starting in 2014, after which time they will no longer be allowed to export raw mineral ore.  Indonesia may need more than 1 gigawatt of additional electricity to power the smelters, S&P said in July. The Indonesia Chamber of Commerce and Industry puts potential demand at 1.5 gigawatts for at least 40 plants. One gigawatt can supply 769,230 Indonesian households.

Indonesia banned exports of 32 types of unprocessed metals, waiving the restriction for companies operating under so-called mining business licenses that are planning to build local refineries. Those shipments are subject to a 20 percent tax.