* Govt ministers say yet to see court verdict on mining rule
* Full court verdict likely to take weeks
* Miners hope ruling will pave way for resumption in exports
(Adds comments, details)
By Fergus Jensen
JAKARTA, Nov 6 Indonesia will review its rules
on the export of unprocessed metal ores after a supreme court
ruling upheld a challenge to a government ban on such shipments,
Energy and Mineral Resources Minister Jero Wacik said on
The court decision could pave the way for a resumption of
exports by small mining companies, which were hit hard by the
restriction imposed in May by Indonesia, the world's largest
exporter of nickel ore and a significant exporter of bauxite and
The ruling is likely to prompt further uncertainty in a $93
billion sector reeling from a series of regulatory changes this
year, although it is unclear whether it will lead to an
immediate increase in exports.
"We want to improve the economy. So we will weigh up
everything and then find the best way out," Wacik told a news
Mining constitutes 12 percent of GDP in Indonesia, the
largest economy in Southeast Asia. Policy flip-flops have been
one of the biggest challenges for investors in the sector, along
with corruption, red tape and poor infrastructure.
Wacik said he was seeking information from the court about
the ruling but had not seen it personally.
The Indonesian Nickel Association (ANI) and the Association
of Indonesian City and Regional governments, which brought the
case, showed Reuters a document on Monday that independent
lawyers said was an extract of the supreme court ruling.
The supreme court's website also listed a status update,
saying the two cases brought by the plaintiffs were "partially
granted" on Sept 12. It gave no further details and did not post
a copy of the decision.
The regulations issued this year aimed to add value to
Indonesian exports and encourage firms to build smelters. The
have already led to billions of dollars in proposed smelter
investments, particularly for bauxite and aluminium.
But many companies have complained the rules hurt their
ability to export, Wacik said. Japanese mining firms in
particular have urged the government not to do anything to stop
exports because it would bankrupt their factories, he added.
"I don't want to bankrupt anybody. That would be a sin,"
Wacik said. "In the transition period (around a 2014 deadline) I
may look at which companies have already built smelters, that
have laid the foundations. These would be allowed to export
again until 2014, and then their exports must stop."
Holders of mining business licenses (IUPs) will need to wait
for clarification of the full verdict from the Supreme Court,
without which the government and other stakeholders can make no
decisions on the matter. This could take weeks.
Bill Sullivan, a lawyer and mining specialist at Christian
Teo Purwono & Partners in Jakarta, said the government might be
able to override the court's decision by getting the trade
ministry to issue another similar regulation.
"The supreme court's principal concern ... seems to have
been that the Ministry of Energy & Mineral Resources had been
inappropriately given control over an export matter, when this
was really part of the authority of the Ministry of Trade,"
The court ruling does not affect parts of the 2009 Law on
Mining that ban all raw mineral exports after 2014.
The government's mining rules do not apply to big players
such as Freeport McMoRan Copper & Gold and Newmont
Mining Corp, which along with coal mining are not
covered by this part of the regulations.
An executive at one small miner, which was forced to sell
its nickel mine because of the export ban, expected the
government to re-issue the rules. Some parts may be stripped out
but requirements for 'clean' permits and a 20 percent export
tax, which have hurt small miners, are likely to stay, he said.
"It will be an even bigger mess for export procedures now
until it is cleared up, because there are a lot of other
downstream departments and agencies that would need to be
instructed, such as customs and ports," said the executive, who
declined to be identified.
Any cancellation of the ban should favour exporters and
increase volumes, according to a report by Riaz Hyder, an
analyst at Macquarie Capital Securities in Jakarta.
"The key takeaway from the reported ruling, however, is that
the industry bodies ultimately appear to have had a fair trial
and common sense has prevailed," the report said.
(Additional reporting by Neil Chatterjee, Andjarsari
Paramaditha and Rieka Rahadiana; Writing by Matthew Bigg;
Editing by Jane Baird)