Clashes over Indonesian mining restrictions are increasingly resonating domestically as seven industry-related groups are seeking government clarity on a controversial raw mineral export ban in 2014. The committee includes the Indonesia Mining Association, Indonesia Mineral Entrepreneurs Association, Association of Indonesian Mining Professionals and the Indonesian Coal Mining Association, among others.
The group has issued a 12-point statement underscoring Jakarta’s poor coordination with agencies. The 2009 law prohibits mineral exports unprocessed by domestic smelters; companies in Indonesian, however, say they won’t have sufficient time to build their own plants; foreign investors are steering clear. The group has demanded Jakarta perform a comprehensive study.
Committee Chair Irwandy Arif, for one, said problems facing the industry need to be audited and identified. “Then after that we will provide solutions for problems to the government,” he said. Of equal importance is “a clash of authority between the central government and regional governments.”
By most accounts, the rules have brought ore shipments to a standstill, costing Indonesia’s nickel and bauxite industries alone $164 million in monthly lost sales. But other minerals and metals are suffering amid Indonesia’s mining boom—prompting some government officials to slowly back off. Energy and Mineral Resources Minister Jero Wacik, for example, has said Jakarta would seek “loopholes” allowing companies to continue operating if they have no smelting operations.
And this week, Deputy Energy and Mineral Resources Minister Susilo Siswo Utomo further echoed these thoughts. “We also realize that not all minerals can be processed,” he conceded at an Australian mining conference.