Jakarta, Dec 7 (Antara) - Indonesia must quicken the development of its
mineral smelters so that reduced revenues from mineral ore exports will
not be ongoing following the ban on exports of raw minerals, which
begins next month.
"The Indonesian Chamber of Commerce and Industry (Kadin) hopes that the
development of smelters in the country will be accelerated for the
interest of the nation," Kadin Deputy Chairman for Regional Empowerment
Natsir Mansur said.
The Indonesian government will implement Law No.4/2009 on Mineral and
Coal Development, which will ban the export of raw minerals beginning
January 12, 2014. Under the law, mining companies are required to
process minerals inside the country before exporting them.
"Based on the law, we are no longer allowed to export (raw minerals) as
of January 12, 2014. We should consistently abide by it," Coordinating
Minister for Economic Affairs Hatta Rajasa said on Thursday.
Information from the ministry of energy and mineral resources, in the
January-October 2013 period, indicates that Indonesia exported 465
million tons of nickel ores, 16.11 million tons of iron ores and sand,
47.01 million tons of bauxite and 1.02 million tons of copper
concentrate.
He said that with the coming into effect of the law, mining companies
were expected to speed the development of their smelters to process raw
minerals before they exported their products.
The minister acknowledged that the banning of raw mineral exports would
temporarily reduce state revenues by about US$4 billion and had the
potential to increase the country's trade deficit.
Indonesia's processed mineral exports stand at US$4.9 billion. The new
law will lead to a decline in unprocessed mineral exports in 2014, which
could lead to a decline in overall exports. The decline in unprocessed
mineral exports could also affect the country's trade balance.
However, the deficit is not expected to grow too large because the
government has been trying to reduce its oil and gas imports,
particularly after it issued a policy on the use of bio-diesel to offset
diesel oil consumption.
"We
can still have its positive aspects because we can reform our industry
at home. After processing by using smelters, we can earn US$5 billion in
exports," Minister Hatta said.
He
predicted that if regulations for minerals were consistently enforced,
Indonesia's trade would become balanced in 2016. Possibly, it could gain
a surplus of about US$1.8 billion.
Deputy
Finance Minister Bambang Brodjonegoro said the ban on unprocessed
mineral exports could increase the trade deficit in the mining sector by
US$10 billion. But the deficit will decline in 2015, and trade in the
mining sector will record a surplus in 2016, after companies begin
operating smelters.
The
same opinion was expressed by Finance Minister Basri Chatib. He said
Indonesia's processed mineral exports could significantly increase in
2015 if the mineral and coal mining law is implemented and smelters have
begun operating.
"Our processed mineral exports, which currently stand at US$4.9
billion, could increase to US$9 billion by 2015," he said here on
Friday.
He noted that Indonesia will also fully implement its biodiesel policy
in 2014. This year alone, Indonesia is expected to save US$200 million
in foreign exchange because of the biodiesel policy. "We hope our
savings increase to US$4 billion in 2014 because of a decline in oil and
gas imports," Basri Chatib said.
In addition, the government plans to increase the tax on imported goods
under article 22. This step is expected to save the government another
US$3 billion in foreign exchange. All of these measures should help
Indonesia to limit its current account deficit," he added.
"By implementing these various policy measures, we can save about US$7
billion, so our foreign trade could have a neutral impact on the trade
deficit," he pointed out.
Therefore, to help reduce the deficit, the development of smelters must be boosted.
"It is very important for Indonesia to accelerate the development of
its smelters to cement its interests as an industrial nation," Natsir
Mansyur of Kadin said.
He added that the condition of Indonesia's industry has not been
healthy because of high imports of raw materials, causing it to depend
upon other countries. This had an impact on its monetary sector and
state budget.
"We hope Indonesia will rise as a major industrial country in the world
and is supported by huge raw mineral reserves and processing
industries," Mansyur said.
Mansyur, who is also president director of PT Indosmelt, recalled that
downstream mineral development programs will have high added values and
extraordinary multiple effects on Indonesia. For Indonesia has a large
potential of minerals that have not been well exploited.
Thus, downstream mineral development programs are vitally important for the state and nation.
Manysur said the development of smelters by businesspeople constituted a
contribution to the development of Indonesia as an industrial state.
"This
is for the interest of the nation. Its effect will trickle down and be
enjoyed by the nation. Therefore, Kadin is of the opinion that the
development of smelters must be accelerated," Mansyur said.
According to the ministry of energy and mineral resources, there are
plans to build 112 mineral smelters in the country, and some are nearing
completion. By November, 23 smelters were more than 80 percent
completed and ready for commissioning.
Other smelter projects are still in the early phase of implementation,
with some not even having conducted feasibility studies. The
construction of the smelters followed the law requiring producers of
minerals to process their ores in the country.
In the meantime, the House of Representatives (DPR)'s Commission VII on
energy affairs urged the government to consistently implement Law No.
4/2009 on Mineral and Coal Development, which bans raw mineral exports
and requires mining firms to build smelters.
"The government must be firm and implement the law. It should not be
afraid of threats by businesses," Gito Guinduto, of the House's
Commission VII, said.
He noted that the government should stop exports by companies that
violate the law. Other countries, he noted, have for many years banned
the exports of raw minerals and built their own smelters.***3***
(T.A014/INE/O001)
(EDITED BY INE)
(T.A014/A/BESSR/O. Tamindael) 07-12-2013 11:49: |
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