Indonesia Seeking Middle Way in Unprocessed Mineral Export Ban
Indonesia's controversial Mining Law No.4/2009, which puts a ban on exports of unprocessed minerals from Southeast Asia's largest economy, is not expected to be implemented in full force on 12 January 2014 as the Ministry of Energy and Mineral Resources now proposes more flexibility for miners. Sukhyar, General Director of Coal and Minerals at the Ministry, said that the proposal would imply a continuation of the export of concentrate or minerals that have been processed to a certain degree until 2017.
Through this delay in full implementation of the law, miners will be given extra time to build smelters.
Positive impact of Mining Law No.4/2009:
• Higher revenue due to value-added exports
• Less dependent on volatile global commodity prices
Negative impact of Mining Law No.4/2009:
• Disturbs trade balance and current account balance on the short-term
• Law is not in line with long-standing contracts, causing legal uncertainty/lack of investor confidence
• Small companies with small profit margins/small processing capacity may seize mining activities
• Can lead to increased unemployment
• Government loses revenue on the short-term due to declining exports
Further Reading:
• Indonesia's Mining Export Ban Impacts on Current Account Deficit in 2014
• Indonesia Might Delay Implementation of Mineral Export Ban by 3 Years
• Indonesia May Review its Ban on the Export of Unprocessed Minerals
• Go-Ahead for Indonesia's Controversial Ban on Unprocessed Mineral Exports
• Indonesia Studying Temporary Exemption for Export of Raw Minerals
• Export Ban on Unprocessed Minerals Temporarily Pressures Trade Balance
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