JAKARTA – The government must act decisively with regard to the export of mineral concentrates. The government’s desire that the mineral mining company immediately make a mineral processing and refining (smelter) site should be immediately realized.
National Coordinator of Publish What You Pay (PWYP) Maryati Abdullah said, at present there are indications that the government is making a push or inconsistency of regulations related to the export of mineral concentrates. In fact, regulatory inconsistencies in terms of downstreaming can potentially lead to social economic jealousy and legal uncertainty in mineral and economic activities which are feared to lead to a poor investment climate.
“The government must take a stand to reduce the amount of mineral concentrate exports. Don’t continue to let it be taken, which will eventually run out too, “said Maryati, Sunday (9/25).
Maryati explained, the opening of export taps in the middle of the mining business permit structuring (IUP) process could trigger a massive exploitation of natural resources. This exploitation will also have an impact on land clearing and forest which causes various conflicts and social losses for the community which in the long run are very ineffective for development.
The government which reasoned that this situation was due to fiscal deficits must be scrutinized. This is because the fiscal deficit is also caused by the government’s dependence on long-term revenue from the sale of natural resources commodities.
Smelter construction as a whole and evenly must also be well developed by the government. The presence of quality smelters will also invite foreign mining companies to conduct refineries in Indonesia. This will later provide more revenue for the government.
For information, based on ESDM Ministry data as of August 2016, there are 26 smelters that have reached the commissioning or production stage (progress 81-100 percent). As for those who reached the end of the construction phase (51-80 percent progress) there were six smelters.
A total of 11 smelters reached the middle of the factory construction phase (31-50 percent progress), and 14 new smelters were in the ground breaking and initial construction stages (11-30 percent progress). Meanwhile, 10 smelters have only just begun the analysis and environmental impact (6-10 percent progress).
The former director general of minerals and coal at the Ministry of Energy and Mineral Resources, R Sukhyar, said that the government was likely to provide export facilities for the concentrate. Although, the previous government has done relaxation through Ministerial Regulation (Permen) No. 1 of 2014. The relaxation will end on January 12, 2017, but this PP does not appear to be heeded.
“But, it seems that in the current conditions the policy (export concentrates) will occur,” Sukhyar said in the discussion “Tugging Policies and Increasing Mineral Value Added”, Sunday (9/25).
If the government has certainly relaxed the export of this concentrate, Sukhyar hopes that there will be a special policy related to the export duty of the concentrate concentrate added. This is in accordance with the downstreaming objectives mandated in Law Number 4 of 2009 so that it can be quickly achieved.
At present there is already a regulation governing concentrate export export duties through Minister of Finance Regulation (PMK) No. 153 of 2014. However, the value of export duty through the PMK is considered to be very small compared to the development of mineral company smelters which has never shown growth.
On the other hand, Sukhyar considered that the construction of smelters in the country had a double benefit. Not only because of the higher mineral value, but also can provide new jobs for the community.
He said, the presence of smelters in Indonesia is currently also in great demand by foreign investors. Because the construction of smelters in Indonesia is more efficient and produces good products than the construction of smelters in neighboring countries such as the Philippines.
Meanwhile, the Indonesian Young Entrepreneurs Association (Hipmi) Central Board asked the government to be careful in opening concentrate tap exports. The reason is, this relaxation concerns the trust and future of long-term smelter investment.
“Don’t let this relaxation undermine investor confidence in the future of smelter investment in the country,” said BPP Hipmi Andhika Anindyaguna, Head of Energy and Mining, BPP some time ago.
Andhika said, the government must be careful and properly manage this policy if it is to be implemented. Because, this relaxation effort will have an impact on investors’ desire to invest their capital in the smelter industry.
“Do not let investors catch the impression that our regulation is very flexible because there are various interests so that investors become distrust to regulators,” Andhika said.
He explained, the value of investment in smelters is now quite large. The value has reached Rp 156 trillion through 27 smelter projects. Because the investment is quite large, smelter companies must be properly guarded so as not to close down and move to other countries.
In Media, Media Coverage | PWYP Indonesia | September 26th , 2016