By Rieka Rahadiana and Fergus Jensen
JAKARTA Aug 28 Indonesia will push for a
relaxation of its controversial 2014 ban on metal ore exports
amid a scramble to support the rupiah and restore confidence in
Southeast Asia's largest economy.
Indonesia is the world's top exporter of nickel ore, coal
and refined tin and its mining industry contributes around 12
percent of gross domestic product (GDP).
However, the ban on unprocessed mineral exports from January
2014 has hit the industry and uncertainties over the country's
mining rules have dented its credibility with foreign investors.
If approved, the reversal of mining policy will upset metal
industries banking on a tightening of ore shipments that have
increased significantly in the lead up to the ban.
However, some in parliament doubted the
government would manage to overturn the rule.
Under the proposed revision, mining companies with smelters
under construction would be allowed to continue to export
unprocessed minerals, but would be charged a progressive duty on
the shipments depending on how close to completion their
projects are, Industry Minister Muhammad Sulaeman Hidayat told
"Miners that have not (started) building smelters yet will
not be allowed to export minerals," Hidayat said.
The proposed changes were confirmed by energy and mineral
resources minister Jero Wacik.
"This is an emergency measure, with global conditions like
this we have to increase our exports," Wacik said, referring to
the government moves to increase mineral exports to maintain the
country's trade balance and rupiah stability.
Wacik also said the government may amend its export policy
after 2014 to encourage investment in the sector.
The proposal comes after Indonesia said this week it would
scrap its export quota system for minerals.
But former parliamentarian Agusman Effendi, who helped
create the export ban as part of the 2009 law on mining, said
the amendment would not be possible.
"We formed a regulation that is very rigid. After four years
(from the date the law was introduced) everything must be
smelted in Indonesia. If it's that easy to change the law, why
didn't they do it earlier?"
Parliamentarian Satya Widya Yudha said the revision would be
unlikely to be passed by parliament.
"We can't annul what has been decided in this law. If they
aren't consistent it will make foreigners question the
Indonesian government's attitude."
But Finance Ministry fiscal policy chief Bambang Brojonegoro
said the progressive export duty could be imposed without
No further details were provided on the range of the
progressive export duty or method for its calculation. Officials
at the Energy Ministry were not immediately available for
The Indonesian mining industry's net revenue is expected to
climb from 25 trillion rupiah ($2.29 billion) in 2012 to around
33.1 trillion rupiah this year, according to government data.