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Small miners in Indonesia need to team up with smelters-govt
April 17, 2012 / 7:10 AM / 6 years ago

Small miners in Indonesia need to team up with smelters-govt

JAKARTA, April 17 (Reuters) - Small miners in Indonesia, a major producer of raw materials, need to team up with larger firms investing in smelters to avoid a 2014 ban on raw mineral exports, a government official said on Tuesday.

Indonesia plans to ban exports of some unprocessed metals from 2014 - including copper, gold, nickel and tin - in a move to push firms to invest in local smelting plants and to gain greater value from exports of finished metals.

“If there is a small company that cannot do the operation, in this case, they can co-operate with other companies,” said Edi Prasodjo, director of coal mining and development at the energy and mineral resources ministry, at a mining conference.

Indonesia, which currently exports large quantities of unprocessed ore to countries such as China, is the world’s largest exporter of refined tin, a major nickel miner and is home to a mine with the world’s second-largest copper reserves and largest gold reserves.

Miners already producing before Feb 6, when the new upgrading rule was announced, must implement the minimum processing and purifying requirements for minerals by 2014. For a factbox on plans for smelters see.

The rule also says firms that held mining exploration permits before the regulation was issued on Feb 6 but had not yet started producing, cannot export unprocessed minerals after May 6, which is causing concern for some miners and foreign ore buyers in China.

Although the rule is meant to apply to miners yet to produce, there is concern that others firms may be affected, with the goverment yet to clarify permits for around half of an estimated 10,000 mining permit holders.

Government and industry sources say that many exploration firms began a production boom last year and that some are now ramping up exports of ores such as nickel to beat the May 6 date.

The industry ministry is not keen on a rule halting exports from next month, and may prefer a tax instead, an issue that now appears to be under discussion. For a factbox on rule changes see.

Prasodjo declined to comment on the possibility of an export tax or whether miners would need to stop exports on May 6.

The government also wants miners to upgrade low grade coal, but the technology is yet to exist commercially and so a decision on when to require upgrading has yet to be made, Prasodjo said.

“Basically, the government will support all efforts from companies who want to develop or want to make some upgrading efforts or facilities,” Prasodjo said, referring to coal.

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