Indonesia eases mineral export ban

Indonesia's president signed off on a controversial mineral ore export ban Saturday after an 11th-hour easing of the policy following opposition from miners and warnings it would hit state coffers, cabinet ministers said.

Ministers announced late Saturday night that President Susilo Bambang Yudhoyono had signed the watered down version of the regulation just an hour before it came into effect.

The government had originally proposed a blanket ban on the export of certain raw minerals, which also included concentrates, but the revised version would ban ore only and allow concentrates to be exported for the next three years.

This means many miners -- including US giant Freeport McMoRan, the biggest miner operating in resource-rich Indonesia -- can continue to export.

Exports of some key metals, such as nickel and bauxite, are still set to be banned in the nearer future, which may affect a number of miners, the Indonesian Mining Association warned.

"Starting from 00:00, January 12, 2014, the export of ore is prohibited," Energy and Mineral Resources Minister Jero Wacik said.

Indonesia's ban on the export of unprocessed mineral ore was aimed at creating added value to the lucrative industry, meaning more jobs and profits would stay in Indonesia.

The proposed ban prompted strong opposition from both foreign and domestic miners, some of whom dubbed the policy "nationalistic", and warned the demands were unrealistic and would lead to widespread closures and lay-offs in the industry.

The government has been scrambling to ease the ban in recent weeks, concluding it was unlikely to have the desired effect and would instead be a drain on state revenues in lost tax and royalties.

Under the regulation, miners will also be obliged to build smelters by 2017, which some in the industry have complained is costly and economically unviable.

Industry Minister M.S. Hidayat said that the government would impose taxes on mineral exports until 2017, when companies will have built smelters and will no longer need to export ore.

"We will slap on an export tax, and every year the tax will get progressively higher," he said.

The energy, finance and trade ministries are due to reveal more precise details of the revised ban.

The export ban was announced several years ago but its implementation was delayed to give miners time to fulfil the requirement of building smelters to process their ore before exporting.

But miners complained this would involve huge investments and that existing infrastructure was not up to the task. Most took little action, betting that Jakarta would back away from the policy.

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