(Reuters) – Indonesia’s new president Joko “Jokowi” Widodo said he wants to sit down with mining companies and other parties in a bid to resolve a row over mining policies that has halted $500 million of metal exports a month in Southeast Asia’s biggest economy.
The comment by the former Jakarta governor, who has a reputation for tackling entrenched interests, appeared to be a positive sign after an increasingly bitter dispute between the mining sector and the outgoing government.
Until this year, Indonesia was the world’s top exporter of nickel ore and a major supplier of copper, iron ore and bauxite. But a ban in January on exporting unprocessed ore and an escalating tax on metal concentrates have paralysed shipments.
“First, I want to sit down with stakeholders, investors, regulators and with the people to know the problem and find a good solution for them. I want to know the details,” Jokowi said in an interview at his residence in Jakarta on Saturday, before he was declared winner of the presidential election on Tuesday.
Jokowi did not say specifically how he would handle the row over the ore ban, and when pressed on the issue an aide stepped in to say “too much detail”. But mining companies will be hoping the new president can help reanimate negotiations, which had run into trouble with the administration of outgoing President Susilo Bambang Yudhyono.
Darmawan Prasodjo, an economic adviser to Jokowi, has said that the new president would not “kill the industry” and that the government and industry were partners who should face the issue together. Prasodjo criticised the current administration for not creating the conditions for the industry to thrive.
“If you want to build a smelter, what do you need? Well, for now, exports should be opened, and power stations need to be built to meet their electricity needs, with competitive rates.”
The comments suggested Jokowi may reconsider the ban on unprocessed ore exports to make it easier for firms that commit to building smelters, but that remains subject to discussion.
The mining policies were intended to increase Indonesia’s returns on the minerals it produces and create jobs. But mining companies say they are causing unnecessary confusion and forcing tens of thousands of miners out of work.
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