Indonesia resumes metal ore concentrate exports after six months

20 July 2014 (Last Updated July 20th, 2014 18:30)

Metal ore concentrate export has resumed from Indonesia nearly after six months with two firms, Sebuku Iron Lateritic Ores (SILO) and Lumbung Mineral Sentosa, agreeing to pay the increased tax levied by the government in January.

Metal ore concentrate export has resumed from Indonesia nearly after six months with two firms, Sebuku Iron Lateritic Ores (SILO) and Lumbung Mineral Sentosa, agreeing to pay the increased tax levied by the government in January.

Indonesian coal and mineral director-general R Sukhyar was quoted by Reuters as saying that SILO had sent two shipments of around 100,000t of iron ore concentrate and Lumbung had shipped around 8,000t of lead and zinc concentrate.

SILO is expected to export eight million tonnes of iron ore concentrate per year, while Lumbung is likely to ship 29,000t annually to China.

The Indonesian Government imposed the ban and introduced a progressive tax on concentrates in January, in an attempt to make the companies build smelters and processing plants within the country.

Under the new law, mining companies are required to pay export tax of up to 60% by the second half of 2016, while concentrate exports will be totally banned in 2017.

"The Indonesian Government imposed the ban ...in an attempt to make the companies build smelters and processing plants within the country."

Imposition of ban was rejected by mining firms including US-based copper mining giants Newmont and Freeport McMoRan Copper & Gold, who have not resumed their copper exports yet, citing that the ban is in violation of their original contracts.

Newmont filed an international arbitration while Freeport-McMoRan signed a memorandum of understanding with the Indonesian Government over tax issues.

The ban and tax increase has halted about $500m worth of monthly mineral ore and concentrate exports from the country.

The new law has given a boost to the domestic smelter projects with 76 firms developing projects with more than 6% complete, up from 66 projects reported earlier this year, Sukhyar said.

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