Asia Mining

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“You lost sir? Follow us.”

Two men emerge from the dark beside me like a mirage, puffing clove cigarettes and twirling large bamboo shoulder baskets over their heads. Their names, they say, are Addis and Sukarno, and they will show me the path into Ijen crater.

It’s a few minutes after 4 a.m., and not five minutes earlier, my “English-speaking guide,” [who didn’t speak a lick of English], had dropped me at a grassy knoll in this remote corner of East Java’s puffing interior with one less-than-illuminating instruction: “walking.” With that, he pointed along a line perpendicular to the road and drove off.

The facts about the path ahead, as I know them, are as follows: The long walk into Ijen crater will include sharp drops, slippery steps and a toxic lake that claimed the life of a French backpacker a few years ago. At 2,600 meters (8,530 feet), Ijen is also a working mine where men carry up to 100 kilos (220 pounds) of sulfur by hand out of the noxious crater and down the volcano’s outer slopes to a weigh station as many as three times a day, six days a week.

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At the Naibabad freight terminal near the northern Afghan town of Mazar-e-Sharif, workers rush to unload wheat and construction materials from Uzbekistan that have arrived on Afghanistan’s only railroad. Trucks will have to carry the cargo through the icy Hindu Kush mountains to the rest of the country because Afghanistan, which encompasses almost 252,000 square miles, has only 47 miles of train track.

The government has grand plans to change that by constructing a 2,237-mile national rail line to transport not just food and other goods but something more vital to the struggling nation’s economy: its vast natural resources, including iron, copper, and gold.

In 2010 the Pentagon estimated Afghanistan is sitting on mineral deposits worth about $1 trillion. In 2011 the Afghan government put the value at $3 trillion. This potential wealth has remained largely untapped, because there’s no way to safely and reliably ship the minerals from the country’s mines.

Afghanistan’s 25-year economic plan calls for connecting the country to established rail lines that run through Asia, Europe, and the Middle East.

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JAKARTA, Feb 24 (Reuters) – Indonesia will ease a controversial tax on mineral concentrate exports for firms that build smelters in the country, in the first rollback of new rules that have caused its mining industry to grind to a halt.

The move is a potential victory for U.S. mining giants Freeport-McMoRan Copper & Gold and Newmont Mining Corp . A senior government official said Freeport would resume exports of copper concentrate in the “near future”.

Around $500 million a month in ore and concentrate exports have stopped since President Susilo Bambang Yudhoyono in January imposed mining rules, which included the progressive tax and a mineral ore export ban, to force companies to build smelters and process raw materials in Indonesia.

“The export tax can be changed. For those who have seriously committed to building smelters, we will ease it,” said Sukhyar, director general of coal and minerals for the mines ministry. “The export tax can be lowered or maybe eliminated to zero percent.”

By contrast, Indonesian government officials have said over the last few weeks that Jakarta would not back down from the export tax or any of the mining regulations passed last month.

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JAKARTA, Feb 12 (Reuters) – Ibris Nickel Pte Ltd has not made a shipment from its remote mine in Indonesia’s Southeast Sulawesi for six weeks and is bleeding $12 million a month, one of hundreds of small miners squeezed by a controversial mineral export ban imposed last month.

The problems at privately owned Ibris illustrate one of several headwinds facing Indonesia, Southeast Asia’s biggest economy, despite a spate of surprisingly strong economic data.

Indonesia is not only confronting a mining crisis, but also the delayed effects of the central bank’s aggressive monetary tightening, political uncertainty in an election year, a slowdown in China, and the tapering of U.S. monetary stimulus.

“We very much doubt the economy has bottomed and expect the downturn to resume form in the current quarter,” said Robert Prior-Wandesforde, an economist at Credit Suisse. Recent data has looked good: December’s trade surplus, at $1.52 billion was double the market consensus, the largest in two years and the third straight monthly surplus, the government said last week.

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JAKARTA – Indonesia’s exports of mineral ore are now at a standstill, with unprocessed bauxite and nickel the target of an outright ban and mining companies either refusing or unable to pay the draconian new export duty on copper and the other concentrates that were given a 12th-hour three-year extension.

That’s only half of the story. Far from clear is whether enforced on-shore processing of mineral ores will actually work when there are serious doubts about the economic viability of building smelters and hydrometallurgical processors in an already over-supplied global market.

The dysfunctional way in which the government has implemented the new value-added policy, with unrealistic deadlines and a clear lack of preparation or understanding of its own contracts of work (COW), has shaken the Indonesian mining industry to its core.

A government regulation extending the January 12 ban for copper giants Freeport Indonesia and Newmont Nusa Tenggara and 66 other, mostly Indonesian, mining companies was undercut the next day by the export tax, which rises from an already daunting 20-25% in the first year to a prohibitive 60% in the second half of 2016.

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