August 29, 2014 / 11:25 AM / 5 years ago

Indonesian miners urge president-elect to relax ore export ban

JAKARTA, Aug 29 (Reuters) - Indonesia’s chamber of commerce mining committee is lobbying president-elect Joko Widodo to relax a seven-month-old ban on unprocessed ore exports and look for better ways to use the natural resources of Southeast Asia’s largest economy.

In January, the government imposed the ban and an escalating export tax regime on metal concentrates to force miners to process raw materials in Indonesia instead of exporting them.

Analysts have warned the ban on ore shipments could cost Indonesia up to $400 million a month in lost exports. The regulations have been heavily criticised, but the government says that while it can change the tax scheme, the ore ban is written in a law it cannot change.

The government last month eased the export taxes to allow Freeport-McMoRan and other miners building smelters to resume shipments. Now bauxite and nickel miners are hoping Widodo will do the same for them and lift the ban on mineral ore after he takes office on Oct. 20.

“This policy has made a situation where our natural resources wealth doesn’t make a contribution (to the economy),” mining committee chairman Poltak Sitanggang told reporters.

“The 2009 (mining) law never banned mineral exports. It just says there should be ‘controls’,” he said.

Sitanggang, who is also chairman of the Indonesian Mineral Entrepreneurs Association, is also challenging the ore export ban policy at Indonesia’s Constitutional Court, the country’s highest legal authority.

Indonesia’s director general of coal and minerals, Sukhyar, who will remain in his current post under Widodo’s leadership, defended the ban on unprocessed mineral exports on Friday, and said that allowing exports would be against the law, and that no further evaluation of the policy was necessary.

President-elect Widodo has indicated that he agrees with the ban in principle, although he has also said he would be willing to sit down with miners to “find a good solution”. (Additional reporting by Wilda Asmarini; Editing by Randy Fabi and Tom Hogue)

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