* Surprise inclusion of export tax adds to confusion over
* Collapse of ore and concentrate exports will hurt
* Nation exported on avg $500 mln/month of ore, concentrates
in Jan-Oct 2013
By Yayat Supriatna
JAKARTA, Jan 24 Indonesia's metal ore and
concentrate exports have ground to a complete halt, government
officials said on Friday, signalling the turmoil in the mining
sector after a ban on ore shipments and an export tax were
imposed nearly two weeks ago.
Southeast Asia's biggest economy introduced a controversial
ore export ban on Jan. 12, although last-minute amendments aimed
to ease the impact of the export ban on miners like
Freeport-McMoRan Copper & Gold and Newmont Mining Corp
. They now face a progressive export tax on concentrates.
"There has been no concentrate export since January 12,"
Bachrul Chairi, director general of foreign trade at the trade
ministry told Reuters. "As of now, no miners or companies have
requested export approval for concentrate or processed ore from
the trade ministry."
Freeport Indonesia and Newmont are in talks with the
government over the new rules and are yet to resume exports
since the new tax was introduced, while the Mineral
Entrepreneurs Association has filed a legal challenge against
the ore export ban.
Under the new regulation, concentrate exports are allowed to
continue for some minerals, including copper, lead, iron ore,
zinc and manganese, though with different purity rules attached.
Concentrates are an intermediate product between ore and metal,
enriched with minerals as a result of processing. ID:nL3N0KP1GE]
"There is still no export for any kind of concentrates so
far," added Sukhyar, director general of coal mines and minerals
at the energy and mines ministry. "Maybe in the middle of this
year some of them can be exported."
The surprise and last-minute inclusion of an escalating
export tax on metal concentrates appears to have forced all
other miners to stop shipments.
"It's a problem because nobody can abide by the export tax,
including Freeport," said Erry Sofyan, secretary general of the
Indonesian Bauxite and Iron Ore Entrepreneurs Association.
GOVT REVENUE UNDER PRESSURE
Under the new rules the export tax for concentrates of lead,
iron, zinc, ilmenite, titanium and manganese is 20 percent for
2014, but will rise to 60 percent by the second half of 2016.
Indonesia is also the world's biggest exporter of nickel
ore, refined tin, thermal coal, and home to the fifth-largest
copper mine and top gold mine. Freeport and Newmont produce 97
percent of Indonesia's copper.
Indonesia's iron ore shipments to China jumped 72.5 percent
last year to 17.6 million tonnes.
The Southeast Asian nation controls around 12-16 percent of
global bauxite supplies, with China again a major buyer.
"Our supplier says the policy might be loosened next month,
but right now it is forbidden," said an iron ore trader based in
China's eastern Shandong province.
"We are planning to talk with some small miners in other
countries like Malaysia, Thailand and the Philippines for
Indonesia-based miners that process some or all of their
metal production through smelters, like nickel producers PT
Aneka Tambang and PT Vale Indonesia Tbk have
escaped the full impact of the new rules.
The long-planned ore ban aims to eventually boost
Indonesia's profits from its mineral wealth by forcing miners to
process their ores before export.
But there are fears a short-term cut in foreign revenue
could widen the current account deficit, which has undermined
investor confidence and hurt the rupiah currency.
The ban is expected to cut government revenue by as much as
$820 million this year, the finance minister has said.
The average value of Indonesia's ore and concentrate exports
was about $500 million per month from January to October 2013,
according to the central bank.
Thousands of mine workers had already been laid off ahead of
the ban, sparking protests in Jakarta.