Amahl S. Azwar, The Jakarta Post, Jakarta | Business | Tue, November 06 2012,
Local mining businesses opposing the government’s unprocessed mineral
exports restriction received endorsement from the Supreme Court in a
verdict that may stir the nation’s plan to encourage value addition at a
downstream level.
The Supreme Court’s official website said a panel of three judges on
Sept. 12 granted parts of a judicial review, filed by members of the
Indonesian Nickel Association (ANI), which contested the Energy and
Mineral Resources Ministerial Decree No. 7 on mineral processing.
The decree applies to the export of 65 mineral commodities, excluding coal, in which, a 20 percent export tax is also imposed.
In a copy of the court’s verdict, obtained from the lawyers representing
the association, it is stipulated that the court had ordered the
government to withdraw four chapters in the regulation, including one
chapter limiting the exports of raw minerals since May 6.
Under the regulation, mining companies would only be granted mineral ore
export permits after receiving clean status’ for their business
licenses as well as showing commitment to establish smelters or
cooperate with other companies to process their mineral ores for export.
The export tax, as previously stated by Deputy Energy and Mineral
Resources Minister Rudi Rubiandini, was needed to prevent the overuse of
mineral ores ahead of the implementation of the government’s plan to
fully prohibit exports of unprocessed metals beginning in 2014.
ANI chairman Shelby Ihsan Saleh said in Jakarta on Monday that with the
verdict, mining companies would be able to export mineral ores
previously banned by the government, which also include bauxite, iron
ore, copper and aluminum.
“Even though it was our association who filed the review on April 12,
other mining companies will also feel the impact [of the verdict],” he
told The Jakarta Post in a telephone interview.
“We are not saying that we reject the government’s plan to encourage a
local smelting process, we just want more time to prepare ourselves
before 2014, in which the government expects us to not export
unprocessed minerals anymore.”
Shelby said the association filed the complaint to the Supreme Court as
most mining companies under ANI’s umbrella had been forced to reduce
their production following the export tax, which led to some of them had
shut down operations.
The nickel mining companies had lost approximately Rp 6 trillion
(US$624.35 million) to 7 trillion in the past five months after the
export tax was implemented, according to the Indonesian Chamber of
Commerce and Industry (Kadin).
In addition, Shelby said, mining companies were not ready to construct
the much needed smelters, citing that it would take a long time for both
infrastructure as well as land acquisitions, and enormous investment.
Kadin chairman for trade, distribution and logistics Natsir Mansyur,
said that in response to the verdict, the organization would press on
the Trade Ministry to regulate the trade administrations for mineral
ores in the future instead of the Energy and Mineral Resources Ministry.
Separately, Energy and Mineral Resources Minister Jero Wacik said he would study the verdict first before issuing any comment.
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