JAKARTA, Jan 24 (Reuters) – Indonesia’s metal ore and concentrate exports have ground to a complete halt, government officials said on Friday, signalling the turmoil in the mining sector after a ban on ore shipments and an export tax were imposed nearly two weeks ago.
Southeast Asia’s biggest economy introduced a controversial ore export ban on Jan. 12, although last-minute amendments aimed to ease the impact of the export ban on miners like Freeport-McMoRan Copper & Gold and Newmont Mining Corp . They now face a progressive export tax on concentrates.
“There has been no concentrate export since January 12,” Bachrul Chairi, director general of foreign trade at the trade ministry told Reuters. “As of now, no miners or companies have requested export approval for concentrate or processed ore from the trade ministry.”
Freeport Indonesia and Newmont are in talks with the government over the new rules and are yet to resume exports since the new tax was introduced, while the Mineral Entrepreneurs Association has filed a legal challenge against the ore export ban.
Under the new regulation, concentrate exports are allowed to continue for some minerals, including copper, lead, iron ore, zinc and manganese, though with different purity rules attached. Concentrates are an intermediate product between ore and metal, enriched with minerals as a result of processing. ID:nL3N0KP1GE]
“There is still no export for any kind of concentrates so far,” added Sukhyar, director general of coal mines and minerals at the energy and mines ministry. “Maybe in the middle of this year some of them can be exported.”
The surprise and last-minute inclusion of an escalating export tax on metal concentrates appears to have forced all other miners to stop shipments.
“It’s a problem because nobody can abide by the export tax, including Freeport,” said Erry Sofyan, secretary general of the Indonesian Bauxite and Iron Ore Entrepreneurs Association.
GOVT REVENUE UNDER PRESSURE
Under the new rules the export tax for concentrates of lead, iron, zinc, ilmenite, titanium and manganese is 20 percent for 2014, but will rise to 60 percent by the second half of 2016.
Indonesia is also the world’s biggest exporter of nickel ore, refined tin, thermal coal, and home to the fifth-largest copper mine and top gold mine. Freeport and Newmont produce 97 percent of Indonesia’s copper.
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