Indonesia Buckles to Bauxite Exports to Support Smelter Construction
Jakarta. Indonesia will allow mining companies to export bauxite to help miners bolster revenue and fund smelter development, an official at the Energy and Mineral Resources Ministry said on Monday.
While exports of the key material in aluminum production will become exempt from s government ban on exports of selected ores that took effect in January 2014, export duties will still apply to discourage the practice.
The government is seeking to increase domestic processing and spur smelter development by 2017.
“We need to have a legal breakthrough to help accelerate the construction [of smelters],” said Said Didu, the head of the energy ministry’s smelter development acceleration team.
Still, the government plans to charge export duties of up to 7.5 percent. The percentage will be reviewed periodically based on smelter development.
Didu said the government would need to revise a 2004 Energy and Mineral Resources Ministry regulation to exclude bauxite from the list of commodities banned for export.
Miners must have at least 30 percent of bauxite smelter facilities built and clear funding sources to qualify for the exemption, Said went on.
“We don’t want shady investors,” he added, without elaborating.
Indonesia is a major bauxite producer and the main supplier of the mineral to China, accounting for around 65 percent of overall supply to the country in 2013 — a year before the ban.
The ban has been inconsistently enforced since its introduction. In February, a government official said the country may revise the total ban on exports of copper and some other ores if mining companies could not meet the 2017 deadline.
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Source: The Jakarta Globe