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Indonesia mining export rule changes needs law revision
December 15, 2016 / 12:29 PM / 9 months ago

Indonesia mining export rule changes needs law revision

JAKARTA, Dec 15 (Reuters) - Indonesia needs to revise its mining law to ease a ban on mineral ore exports and is unlikely to meet a deadline of early next year for the change, senior politicians warned on Thursday.

The ore shipments ban, which requires miners to build smelters to process ore locally and halt mineral exports from next month, was implemented in January 2014, although last minute amendments were made to ease its impact.

A revision could allow miners such as the local unit of Freeport McMorRan Inc to export copper concentrate beyond next year’s Jan. 12 deadline.

But there was little scope to change the export regulation until the existing law was changed, Luhut Pandjaitan, who oversees energy and mineral resources, said.

“Even if a government regulation is issued, it will be against the law. So, we encourage parliament to review or to fix this mineral law,” Pandjaitan told reporters.

Earlier this year, lawmakers said they hoped to revise the rules by September, giving miners more time to build the smelters required to process ore.

However, a member of the parliamentary commission overseeing mining said that it had not yet received a draft for the revision from the government to discuss.

“We have not had any meeting yet on the mining (law),” Dito Ganinduto, a member of the commission, said, adding that it was unlikely a revision could be concluded before the deadline.

Parliament is in recess until Jan. 3.

But the Energy and Mining ministry was in talks with the Coordinating Ministry for Economic Affairs to try to reach a solution on easing the ban, Sujatmiko, a spokesman for the Energy and Mining ministry, said.

Freeport McMoRan Chief Executive Richard Adkerson said last week that he had met Indonesia’s mining minister, Ignasius Jonan, and was confident the situation would be “resolved”.

“This is something that we have gotten assurances from not only the minister but the president himself. So I am confident,” said Adkerson, speaking at a conference in New York on Dec. 6.

The consequences of a ban would be “dire for Indonesia and for Papua particularly”, where Freeport’s Grasberg mine is located, Adkerson said.

Freeport would have to cut back operations and curtail development of its underground mine at Grasberg, where it is spending about $1 billion a year, he added.

If the ban did come into effect, the miner could continue sending copper concentrate to its Gresik smelter on Java island, which takes around a third of Grasberg’s output. (Reporting by Bernadette Christina Munthe and Nicola Mordant in VANCOUVER; Writing by Fransiska Nangoy; Editing by Alexander Smith)

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