Indonesia to Allow Nickel Ore, Bauxite Exports Under New Rules

Draft revision focuses on a licensing regime change and flexibility for mineral exports

By The Jakarta Post
Friday, October 28, 2016

The government has finalized the draft revision of a government regulation on coal and mineral resources mining activities, which focuses on a licensing regime change and flexibility for mineral exports.

Energy and Mineral Resources Ministry secretary-general Teguh Pamudji said the revision of Government Regulation No. 1/2014 was aimed to encourage mining companies to shift the contract of work (CoW) to a special mining license (IUPK).

"Article 169 in the 2014 Mining Law says that in one year, the CoW must be changed to the IUPK," Teguh said in Jakarta, as quoted by Kontan on Tuesday.

However, he highlighted several issues in the process including the percentage of state revenue and the increasing scarceness of mining areas.

In response, the government will grant a five-year export permit in exchange for the permit conversion, which is applicable for nickel ore and bauxite miners that currently are building refineries. The two commodities are currently banned from export because of a downstreaming program.

Unlike the current procedure where export permits are issued for six months with a possible six-month extension, the new rule will provide a one-year permit, which can be extended for another year.

Budi Santoso, a director at energy think tank the Centre for Indonesian Resources Strategic Studies (Cirrus), warned the government not to unfairly favor certain entities, especially in the mineral resources industry.

“We must keep the nickel ore and bauxite export ban,” he said.

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