Govt working to limit impacts of ore export ban

JAKARTA. The government is in the process of formulating a regulation to help cushion the negative impacts of the ban on raw ore exports, slated to come into effect on Jan. 12.

Trade Minister Gita Wirjawan was upbeat that the government would soon come up with a regulation that would help companies and workers in the mining sector comply with the export ban.

 “I am optimistic that we will be able to deliver. We are now still mulling the right formula to minimize the damage this policy could create in the future,” said Gita, recently.

The Mining Law and its implementing regulations will only allow the export of ore that has been locally processed to help develop the downstream industry and create added value.

The policy is based on the Mining Law, which required the government and industry to develop the downstream sector as soon as the law was enacted in 2009.

Giant miners PT Freeport Indonesia, a unit of US-based Freeport McMoRan Copper and Gold Inc., and Newmont Nusa Tenggara, a unit of US-based Newmont Mining Corp., have said that they will have to halt mining operations if the ban is imposed.

China, which heavily relies on raw bauxite from Indonesia, and Japan, the country’s largest nickel buyer, have lobbied the government and legislators to have the ban relaxed.

Gita acknowledged that many people in the mining industry would lose their jobs in the early months after the ban took effect.

He suggested the government provide a kind of safety net for those who lose their jobs as well as incentives for mining companies. “I have discussed this matter with the businesses. They are showing a willingness to comply and also the commitment to minimize any damage,” he said, refusing to elaborate further.

Coordinating Economic Minister Hatta Rajasa said recently that the government was seeking ways to allow mining companies that had concrete plans to build smelters to be able to export ore, even if their smelters were not able to process their entire output.

 “For miners that clearly don’t have any processing facilities, let alone plans, it will be easy for me. They will be banned from exporting. No excuses,” he said.

He said he still needed to consult with legal experts to ensure that there would be no violations of the law, and hoped to present the conclusions to President Susilo Bambang Yudhoyono later this week in a planned limited Cabinet meeting.

The President would have the final say on the proposal, the minister said. (Dicky Christanto)