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Issue #592

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2014 Media Kit

Indonesia resumes metal concentrate exports after 6-month halt

By: | at 08:40 AM | International Trade  

Indonesia has resumed exports of metal ore concentrates, a mining ministry official said, ending a six-month stoppage resulting from a new policy to improve returns on resources shipped out of southeast Asia’s largest economy.

Indonesia in January banned unprocessed ore exports and levied an escalating tax on metal concentrate exports as part of the policy to force miners to build smelters and process minerals domestically.

Disputes and confusion over the rules halted about $500 million of monthly mineral ore and concentrate exports. Prior to the ban, Indonesia was the world’s top exporter of nickel ore and a major supplier of iron ore and bauxite.

However, last week shipments of iron ore, lead and zinc concentrate left the country after two firms agreed to pay a 20 percent export tax, coal and minerals director-general Sukhyar told reporters late on Friday.

“There are two firms that have started to export; Sebuku Iron Lateritic Ores (SILO), and Lumbung Mineral Sentosa,” Sukhyar said, adding that SILO had sent two shipments or around 100,000 tonnes of iron ore concentrate and Lumbung had shipped around 8,000 tonnes of lead and zinc concentrate already.

“They finally wanted to pay it,” Sukhyar said, referring to the escalating tax that has been rejected by U.S. miners Newmont Mining Corp and Freeport McMoRan Copper & Gold Inc , and is now the subject of a contract dispute awaiting international arbitration.

SILO expected to export 8 million tonnes of iron ore concentrate a year, while Lumbung should ship 29,000 tonnes a year, he added. Both companies were exporting to China, Sukhyar said.

Separately, Sukhyar said there were now 76 firms with smelter projects more than 6 percent complete, up from 66 the government reported earlier this year.

“They have made good progress,” Sukhyar said, referring to miners adapting to the new minimum processing requirements introduced in January. He stopping short of identifying the firms in the latest data.