July 18, 2014 / 12:41 PM / 3 years ago

UPDATE 2-Indonesia ships first metal concentrate since January halt

(Recasts, clarifies that unprocessed ore exports remain banned,
adds details)
    By Wilda Asmarini
    JAKARTA, July 18 (Reuters) - Indonesia has resumed some
exports of metal ore concentrates after two firms gained permits
to ship iron ore, zinc and lead, a mining ministry official
said, the first shipments of their kind since the country
changed its export rules in January.
    The rule change, which banned unprocessed ore exports and
levied an escalating tax on metal concentrate shipments, was
part of a policy to force miners to build smelters and process
minerals domestically.
    Unprocessed ore exports are seen by the government as a
waste of Indonesia's resource wealth and are still banned.
Copper concentrate shipments remain at a standstill as some
miners say the tax is in breach of their contracts.
    Disputes and confusion over the rules halted about $500
million of monthly mineral ore and concentrate exports. Until
this year, Indonesia was the world's top exporter of nickel ore
and a major supplier of iron ore and bauxite.
    Last week three shipments of iron ore, lead and zinc
concentrate left the country after two firms agreed to pay the
escalating tax, coal and minerals director-general Sukhyar told
reporters late on Friday.
    "There are two firms that have started to export; Sebuku
Iron Lateritic Ores (SILO), and Lumbung Mineral Sentosa,"
Sukhyar said, adding that SILO had sent two shipments or around
100,000 tonnes of iron ore concentrate and Lumbung had shipped
around 8,000 tonnes of lead and zinc concentrate already.
    The tax on exports increases from 20 percent this year to 60
percent in the second half of 2016 for all metals but copper,
for which the base rate was set at 25 percent. 
    "They finally wanted to pay it," Sukhyar said, referring to
the escalating tax that has been rejected by U.S. copper miners
Newmont Mining Corp and Freeport McMoRan Copper & Gold
Inc, whose exports have not resumed. 
    The stoppage has led Newmont to declare force majeure and
file for international arbitration. 
    SILO expected to export 8 million tonnes of iron ore
concentrate a year, while Lumbung should ship 29,000 tonnes a
year, he added. Both companies were exporting to China, Sukhyar
    Separately, Sukhyar said there were now 76 firms with
smelter projects more than 6 percent complete, up from 66 the
government reported earlier this year. The initial list does not
include any plans for copper smelters.
    "They have made good progress," Sukhyar said, referring to
miners adapting to minimum processing requirements introduced in
January. He stopped short of identifying the firms in the latest
data or stating what metals would be produced. 
    Below is a table of the government smelter project data:
Progress   Number of projects
           As of Jan    As of July
0-5%          112          102
6-10%          14           14
11-30%         15           12
31-50%         10           21
51-80%          2            4
81-100%        25           25


 (Writing by Fergus Jensen; Editing by Dale Hudson)

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