Indonesia Eases Restrictions on Some Mining Exports

The Indonesian government issued new regulations on January 12 that significantly relaxes a ban on the export of nickel ore and bauxite. The new rules also extends permission for the export of mineral concentrates.

The prohibition, which was imposed in 2014, was meant to force mining companies to build smelters in Indonesia. The new rules now require miners to reserve at least 30% of their smelter capacity to process low-grade nickel ore, with any excess ore allowed to be exported. Bauxite with an aluminum oxide content of at least 42% may be exported "in certain amounts" that will be decided by the government and independent inspectors.

"The government of Southeast Asia's biggest economy has faced a hefty budget deficit and missed its 2016 revenue target by US$17.6 billion," reports Reuters news agency. "The resumption of shipments may have been drafted to help stop the gap."

Reuters quoted Coals and Mineral Director General Bambang Gatot as saying that exports would be allowed up to five years. But foreign dompanies must switch to a new system of special mining licenses to be able to export nickel ore and bauxite, which could mean having to pay new taxes and royalties as well as divestment of up to 51% of ownership to domestic investors. 

Before the ban, Indonesia used to be the world's largest exporter of nickel ore. The Philippines has replaced it, but Manila has started restricting output because of environmental concerns, notes Reuters. 


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