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The national output of a number of commodities has dropped significantly this year, as expected, on account of the government’s mineral ore export ban.
The incoming administration, led by president-elect Joko “Jokowi” Widodo, is expected to soon lay out clear policies in the mineral sector, which has been severely impacted by the ban.
Only a few million tons of ore were produced during the January to August period this year, most likely only to meet domestic demand, figures from the Energy and Mineral Resources Ministry’s directorate general of mineral and coal showed.
The production of bauxite, for example, was a mere 2.8 million tons during the January-August period, compared to almost 60 million tons throughout last year. This year’s output is expected to see a few additional tons by year-end.
“The production of several minerals was from newly established smelters, such as nickel pig iron products,” mineral and coal director general R. Sukhyar said.
On Jan. 12, the government banned overseas shipments of mineral ores as part of an attempt to boost the country’s downstream industry. Only processed minerals with a regulated purity level and end products of metal are allowed to be exported.
The government expects that in 2017, the country will only export mineral end products, instead of raw ore. In the meantime, it is still allowing the export of concentrates, such as copper concentrate produced by PT Freeport Indonesia and PT Newmont Nusa Tenggara, until 2017.
Despite an ongoing legal battle at the Constitutional Court over the 2009 Mining Law, which is the legal basis for the controversial export ban policy, foreign investors are seeking to develop smelters to process bauxite and nickel ores — the two main commodities in Indonesia — with the help of local partners.
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