Jakarta, May 17, 2012 (ANTARA) - The export of mining minerals is believed to
have brought very little benefits to the people of
natural-resources-rich Indonesia so far.
Most major mining companies operating in the country belong to foreign nations, and their products are for export.
Trade Minister Gita Wirjawan on May 7 signed a regulation to limit the export of mining products, after considering the impact of mineral exploitation on the environment and to ensure sustainable supply for domestic demand.
The policy on control mineral exports is aimed at preventing excessive mining, meeting domestic need, and ensuring environment-friendly mining activities.
The regulation requires mining companies to obtain a recommendation from the Directorate General of Minerals if they wish to export.
Such recommendations will be given only for companies that meet three conditions: They must submit their work plan on the development of processing and refining plants before 2014, sign integrity pacts, and have a clear and clean status.
According to regulation number 29/M-Dag/Per/2012, companies that wish to export are also required to pay their royalties and posses a mining permit.
Mining products are divided into three categories � metal minerals, non-metal minerals, and rocks � which in turn have 65 sub-categories.
There are 21 types of metal minerals, including iron ore, manganese, copper, nickel, cobalt, aluminium, lead, zinc, chromium, molybdenum, ilmenite, titanium, zirconium, silver, gold, platinum, and antimony.
The 10 non-metal minerals include quartz, kaolin, limestone, feldspar, zirconium silicate, zeolite, and diamond. The rock category includes marble, onyx, granite, topaz, jade, toseki, and peridotite.
In order to control exports, the government also plans to impose a 20 percent export tariff on 14 unprocessed mining minerals: copper, gold, silver, tin, lead, chromium, platinum, bauxite, iron ore, iron sand, nickel, molybdenum, manganese, and antimony.
Industry Minister M. S. Hidayat in April had expressed his hope for speeding up the implementation of the export ban, in response to reports of overexploitation in iron ore mining.
"Miners exploit iron ore greedily and export it continuously. I suggest imposing export tax to slow down large-scale exports of this country`s natural resources," he declared.
"I wish the government will impose 25 percent, but it`s not me who decides; it`s the authorities of the energy and mineral resource ministry," Hidayat added.
It was initially suggested the tax be as high as 50 percent.
However, according to Finance Minister Agus Martowardojo, the regulation on export duty for the 14 mining commodities is still being finalised.
"We have already discussed it [the regulation] with the coordinating minister for economic affairs, so we are optimistic that in the near future it will be completed," the minister stated on May 8.
He hoped the state`s income would rise after the implementation of the regulation, because the export revenues of the 14 mining commodities reached US$8 billion to US$10 billion a year.
"So, that is what will be affected by export duty regulation. Of course, the mechanism will be worked out later. Technically, if the duty is set at an average of 20 percent, the income will be 20 percent of US$8 billion or US$10 billion," Agus explained.
However, Chief Economic Minister Hatta Rajasa earlier explained the main objective of the policy was not to increase the state`s income but to prevent overexploitation of the country`s mining resources and encourage development of downstream industries in the country.
"It is not solely for increasing income, but for preventing overexploitation and overproduction and also promoting downstream industry development," he said.
�The plan is designed to ensure the management of natural resources in the country is done in a responsible way and to find a just amount of royalties for mining materials,� Hatta added.
He said the policy would not apply to mining companies that have signed work contracts and are under the government`s ownership, such as PT Newmont, because the company had already built a smelter to process mining materials in Indonesia.
In early May, Minister of Energy and Mineral Resources Jero Wacik mentioned five conditions that companies must meet before they could export mining minerals.
The first condition put in the ministerial regulation was they must pay 20 percent export duty; the second was they must have "clean and clear" certificates; the third, they must pay all taxes and fulfil non-tax obligations; the fourth, they must present their processing and refining plans; and the fifth involved signing an integrity pact.
Jero said the integrity pact stated they must not export raw minerals after 2014 and must protect the environment.
"The companies have been given time [to prepare]," he added.
In addition to the 14 mining minerals, the government is also considering restricting coal exports in order to guarantee sustainable use of domestic coal.
"A draft of the regulation is being discussed with officials of responsible ministries," said Edy Prasodjo, the energy and mineral resource ministry`s coal director, recently.
"There are several forms being put on the table. There will be categories [of coal] that could be exported and others that are not for export," he noted.
The regulation on coal exports is necessary because coal production has been increasing significantly. In 2012, coal production is estimated to reach, or probably exceed, 330 million tons.
"So, next year the production could exceed 450 million tons or even reach 500 million tons," Edy stated.
"The consumption of coal in the domestic market was initially 30 percent, but now it is 25 percent, and it could become just 10 percent later," he added.
An energy analyst of ReforMiner Institute, Komaidi Notonegoro, supports the plan to control coal exports. "I even hope the coal exports are stopped, so it could be fully used for domestic purposes. Coal production should be adjusted to the domestic consumption rate," he said.
The government`s policy has also been lauded by Chairman of the Indonesian Mining Community (MPI) Presidium Herman Afif Kusumo, who expressed hope that it would be effective in curbing the exploitation of natural resources.
"It has come to the government`s notice that new mining businesses have carried out large-scale exploitation of export mineral deposits without taking sufficient steps to rehabilitate the environment," he said.
"Processing mining resources in the country will give added value. Besides, we don`t want to see the country being exploited by foreigners, while the mining tax is low," Herman added. ***2***
(f001/a/INE/a014)
(T.F001/A/KR-BSR/A/A014) 17-05-2012 18:47:48
Most major mining companies operating in the country belong to foreign nations, and their products are for export.
Trade Minister Gita Wirjawan on May 7 signed a regulation to limit the export of mining products, after considering the impact of mineral exploitation on the environment and to ensure sustainable supply for domestic demand.
The policy on control mineral exports is aimed at preventing excessive mining, meeting domestic need, and ensuring environment-friendly mining activities.
The regulation requires mining companies to obtain a recommendation from the Directorate General of Minerals if they wish to export.
Such recommendations will be given only for companies that meet three conditions: They must submit their work plan on the development of processing and refining plants before 2014, sign integrity pacts, and have a clear and clean status.
According to regulation number 29/M-Dag/Per/2012, companies that wish to export are also required to pay their royalties and posses a mining permit.
Mining products are divided into three categories � metal minerals, non-metal minerals, and rocks � which in turn have 65 sub-categories.
There are 21 types of metal minerals, including iron ore, manganese, copper, nickel, cobalt, aluminium, lead, zinc, chromium, molybdenum, ilmenite, titanium, zirconium, silver, gold, platinum, and antimony.
The 10 non-metal minerals include quartz, kaolin, limestone, feldspar, zirconium silicate, zeolite, and diamond. The rock category includes marble, onyx, granite, topaz, jade, toseki, and peridotite.
In order to control exports, the government also plans to impose a 20 percent export tariff on 14 unprocessed mining minerals: copper, gold, silver, tin, lead, chromium, platinum, bauxite, iron ore, iron sand, nickel, molybdenum, manganese, and antimony.
Industry Minister M. S. Hidayat in April had expressed his hope for speeding up the implementation of the export ban, in response to reports of overexploitation in iron ore mining.
"Miners exploit iron ore greedily and export it continuously. I suggest imposing export tax to slow down large-scale exports of this country`s natural resources," he declared.
"I wish the government will impose 25 percent, but it`s not me who decides; it`s the authorities of the energy and mineral resource ministry," Hidayat added.
It was initially suggested the tax be as high as 50 percent.
However, according to Finance Minister Agus Martowardojo, the regulation on export duty for the 14 mining commodities is still being finalised.
"We have already discussed it [the regulation] with the coordinating minister for economic affairs, so we are optimistic that in the near future it will be completed," the minister stated on May 8.
He hoped the state`s income would rise after the implementation of the regulation, because the export revenues of the 14 mining commodities reached US$8 billion to US$10 billion a year.
"So, that is what will be affected by export duty regulation. Of course, the mechanism will be worked out later. Technically, if the duty is set at an average of 20 percent, the income will be 20 percent of US$8 billion or US$10 billion," Agus explained.
However, Chief Economic Minister Hatta Rajasa earlier explained the main objective of the policy was not to increase the state`s income but to prevent overexploitation of the country`s mining resources and encourage development of downstream industries in the country.
"It is not solely for increasing income, but for preventing overexploitation and overproduction and also promoting downstream industry development," he said.
�The plan is designed to ensure the management of natural resources in the country is done in a responsible way and to find a just amount of royalties for mining materials,� Hatta added.
He said the policy would not apply to mining companies that have signed work contracts and are under the government`s ownership, such as PT Newmont, because the company had already built a smelter to process mining materials in Indonesia.
In early May, Minister of Energy and Mineral Resources Jero Wacik mentioned five conditions that companies must meet before they could export mining minerals.
The first condition put in the ministerial regulation was they must pay 20 percent export duty; the second was they must have "clean and clear" certificates; the third, they must pay all taxes and fulfil non-tax obligations; the fourth, they must present their processing and refining plans; and the fifth involved signing an integrity pact.
Jero said the integrity pact stated they must not export raw minerals after 2014 and must protect the environment.
"The companies have been given time [to prepare]," he added.
In addition to the 14 mining minerals, the government is also considering restricting coal exports in order to guarantee sustainable use of domestic coal.
"A draft of the regulation is being discussed with officials of responsible ministries," said Edy Prasodjo, the energy and mineral resource ministry`s coal director, recently.
"There are several forms being put on the table. There will be categories [of coal] that could be exported and others that are not for export," he noted.
The regulation on coal exports is necessary because coal production has been increasing significantly. In 2012, coal production is estimated to reach, or probably exceed, 330 million tons.
"So, next year the production could exceed 450 million tons or even reach 500 million tons," Edy stated.
"The consumption of coal in the domestic market was initially 30 percent, but now it is 25 percent, and it could become just 10 percent later," he added.
An energy analyst of ReforMiner Institute, Komaidi Notonegoro, supports the plan to control coal exports. "I even hope the coal exports are stopped, so it could be fully used for domestic purposes. Coal production should be adjusted to the domestic consumption rate," he said.
The government`s policy has also been lauded by Chairman of the Indonesian Mining Community (MPI) Presidium Herman Afif Kusumo, who expressed hope that it would be effective in curbing the exploitation of natural resources.
"It has come to the government`s notice that new mining businesses have carried out large-scale exploitation of export mineral deposits without taking sufficient steps to rehabilitate the environment," he said.
"Processing mining resources in the country will give added value. Besides, we don`t want to see the country being exploited by foreigners, while the mining tax is low," Herman added. ***2***
(f001/a/INE/a014)
(T.F001/A/KR-BSR/A/A014) 17-05-2012 18:47:48
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