| JAKARTA, July 22
JAKARTA, July 22 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.
Freeport-McMoRan Copper & Gold Inc and Newmont
Mining Corp, which account for 97 percent of Indonesia's
copper production, exported tens of thousands of tonnes of metal
concentrate a month before a row over an escalating export tax,
alongside the ore ban, halted shipments.
The changes have prompted a constitutional court challenge
and an international arbitration case brought by Newmont Mining
earlier this month.
As relations became more strained, the outgoing government
threatened to revoke Newmont's contract and hand it over to
state miner Aneka Tambang (Antam).
RESOURCES POLITICALLY SENSITIVE
Syahrir Abubakar, the executive director of the Indonesia
Mining Association, said any move to review mining regulations
would be welcomed. "There are contradictions from one article to
the next, and many renegotiations have been held up because of
But giving ground to foreign mining companies could still be
politically difficult for Jokowi given nationalist pressure over
the issue, some experts say.
Jokowi's vice president has also appeared to take a tougher
line. Jusuf Kalla, a businessman from the nickel-rich eastern
island of Sulawesi, was partly responsible for the mining policy
when he was also vice president in 2007.
"They shouldn't be treated differently," Kalla said in a
separate interview, referring to the rejection by mining
companies such as Freeport and Newmont of the export tax. "It is
only an export tax for two-three years."
Kalla also said there should be no tampering with the ban on
unprocessed ore exports signed into law five years ago.
"It is the law. We agreed on it in 2009. We discussed it in
2007. I agree that minerals should have value added because if
you export mineral ore, nickel ore ... it is not good for jobs
for the country."
(Additional reporting by Fergus Jensen; Editing by Ed Davies,