Indonesia faces criticism for ban on mineral exports

14 January 2014 (Last Updated January 14th, 2014 18:30)

The Indonesian government has imposed a ban on raw minerals exports in an attempt to boost domestic mineral processing, which is believed to aid industrial development.

The Indonesian government has imposed a ban on raw minerals exports in an attempt to boost domestic mineral processing, which is believed to aid industrial development.

The decision has come at a time when the Indonesian rupiah has fallen nearly 22% from last year and the country is facing tough trading conditions.

The regulation bans the export of nickel, bauxite and tin ore and would hugely impact global industry, as Indonesia exports about fifth of the total nickel supply.

As per the new rule, export of base metals including copper, manganese, lead, zinc and tin will continue in concentrate up to 2017.

A last-minute presidential decision has given reprieve for some companies, including mining giant Freeport-McMoRan Copper & Gold, to continue exporting copper from the country.

Indonesia energy and mineral resources minister Jero Wacik said the ban was first written into law in 2009 and was scheduled to be enforced from midnight on 12 January this year.

"The goal is in line with the law, to increase the added value," Wacik said.

Several mining companies and a group of ministers held talks to discuss the new law, which faced severe criticism during the initial stages.

Following this, the government was compelled to enforce the presidential regulation.

Economists and mining companies believe that the new law will not improve the country's economy, as it will mean an end to billions of dollars in export revenues. They say it will also threaten more than 800,000 people's jobs.

Ministers believe that the temporary reprieves for the country's major mining companies will reduce jobs lay-offs and damage to the local economy in mining areas.

Nri