| JAKARTA, April 12
JAKARTA, April 12 Indonesia should quickly
impose a tax on mining exports, the industry minister said on
Thursday in comments likely to worry miners in the world's top
exporter of thermal coal and tin.
Government officials have previously said a 25 percent tax
on mining exports is being considered for this year and a 50
percent tax for next year, though miners and industry analysts
have speculated that such plans are likely to be toned down.
"The mining export tax has to be imposed as soon as
possible," Mohamad S. Hidayat told Reuters.
The tax plan is the latest in a series of proposed
regulations that have rattled Indonesia's mining sector both
because they could increase the cost of business and because of
a perception of inconsistent policymaking.
Mining is vital to Southeast Asia's largest economy, which
grew at 6.5 percent last year in part because the sector.
Other new regulations include a plan under which some
foreign mining companies must divest 51 percent within 10 years
and a proposed ban on the export of some unprocessed metals by
Even so, the outlook for Indonesia's mining sector remains
stable despite stringent regulations that are likely to drive up
the cost of business, ratings agency Standard & Poor's said on
"Standard & Poor's Ratings Services believes that while
mining regulations will become more onerous in Indonesia, the
government is unlikely to implement some of its more extreme
regulations," the agency said in a report.
The report posed a question that has exercised many in the
mining sector in recent weeks: will mining policy be driven
solely by attempts to derive more state benefit from the sector,
a policy sometimes called "resource nationalism"?
Or will that drive be tempered by fear of scaring off mining
investment from a country that is the world's largest exporter
of thermal coal and refined tin?
S&P said that ultimately prudence would determine policy and
Indonesian officials were mindful of the global competition for
investment in the mining sector, which contributes about 11
percent of GDP.
"The high economic importance of the mining sector to
Indonesia's central and regional governments provides a strong
incentive for the government to adopt reasonable regulations
that do not materially dent the sector's performance or its
attractiveness to investors," said Standard & Poor's credit
analyst Xavier Jean.
S&P is likely to release a report soon on the Indonesian
government's sovereign rating.
Fitch and Moody's agencies upgraded the country to
investment status in recent months in a reflection of its stable
fiscal policy framework, large domestic market and strong growth