November 7, 2012 / 1:35 PM / 7 years ago

Indonesia's metal export policy in limbo

JAKARTA, Nov 7 (Reuters) - Indonesia is not sure if its own rules on mining exports still apply, after a court ruling upheld an industry challenge to its policy, the country’s trade minister said on Wednesday.

The decision could pave the way for a revival of mineral exports curbed by a government rule in May, though the supreme court has yet to publish details of the verdict, leaving both the government and industry uncertain of its implications.

“I don’t know,” said Trade Minister Gita Wirjawan, when asked if the new rules imposing restrictions and a tax on raw mineral shipments were still valid.

“This is a new decision, but of course this is a constitutional state and we respect the decisions of the highest legal institution,” said Wirjawan on the sidelines of a conference aimed at boosting investment confidence.

Changes to mining rules this year in Indonesia, the world’s largest exporter of nickel ore and a significant exporter of bauxite and iron ore, have met widespread criticism from a sector facing pressure from declining commodity prices.

Details of the supreme court verdict remained in the hands of presiding judges, court spokesman Ridwan Mansyur said, declining to say when this information would become publically available.

“Normally the reviews are very quick,” Mansyur said, referring to the verdict documentation. Mansyur did not comment on whether the government had the right to appeal the decision.

The Indonesian Nickel Association (ANI), which brought the case, showed Reuters a document on Monday that independent lawyers said was an extract of the verdict.

“It is very difficult to judge whether all the implications of this court statement will influence the whole industry,” said Agus Suhartono, the chief operating officer of Ibris Nickel, a nickel miner in Indonesia.

ANI said its members challenged four chapters of the regulation and these were annulled by the court. These chapters restrict exports and effectively put the central government back in charge of mining after a 2004 regional automony law that put the sector in the hands of local governments.

Decentralization led to a mining boom as smaller players flooded into the sector, but also meant licensing and permits were issued without proper supervision.

Earlier in the week, Indonesia’s chamber of commerce (Kadin) said in future mining exports would be supervised by the trade ministry instead of the energy and mineral resources ministry.

“We will sit down at the trade ministry and discuss with other ministries how to address the issue going forward,” Wirjawan said. (Editing by Neil Chatterjee and William Hardy)

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