The opening of mineral concentrate tap tap will undermine the confidence of entrepreneurs who have committed to carry out downstreaming in the mining sector.

Jakarta – The government’s plan to relax the rules on exposing raw minerals shows an inconsistent attitude towards the commitment to develop industrialization in the mining sector. In fact, it is feared that this relaxation could undermine the credibility of domestic businesses who have committed to building downstream mineral processing industries.

The Indonesian Smelter and Mineral Processing Association opposes the government’s plan to relax the export policy of raw mineral materials. Because, the step is considered unfair.

“There are businessmen who obey the law. In fact, some have built up to 80 percent smelters, “said Chairman of the Indonesian Smelter and Mineral Processing Association, Raden Sukhyar, in a discussion entitled Tug of War on Mineral Export Prohibition Policies in Jakarta, Sunday (9/25).

He warned that if the government continued to open the raw mineral export tap, it would undermine the confidence of entrepreneurs who had committed to run downstream. “If there are businessmen who are obedient, they should be appreciated,” he said.

The former Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources added that currently, the construction of smelters (smelters) is 34 units of nickel. Then, in a zircon 11 smelter bururutan, as many as seven smelters bauxite, iron five smelters, zinc 4 smelters, kaolin 4 smelters and manganese 2 smelters. Meanwhile, ESDM Ministry data, as of September 2016 from 84 Mining Business Permits, 64 smelters have been built.

Extra time

In fact, the government has drawn up rules so that companies in the mineral and coal (minerba) sector make downstreaming to get added value. The rule is contained in Law No. 4 of 2009 concerning Minerba, namely the obligation to make derivative products no later than 5 years after the Act was enacted.

However, the time limit was extended for another 3 years with the Minister of Energy and Mineral Resources regulation number 1 of 2014. “I am sure that the making of the smelter is practically only done in 2014,” Sukhyar said.

Sukhyar assessed that the extension of time showed the government’s inconsistency with the rules he made himself. “Even in the rules, the winner of the Contract of Work (KK) even though it is actually prohibited from selling ore (iron ore) in the country though, let alone exported,” he continued.

Similar rejection was also expressed by the National Coordinator of the Publish What You Pay (PWYP) Maryati Abdullah. According to him, the government has stalled eight years to carry out the downstreaming since the issuance of Law No. 4 of 2019 until 12 January 2017.

“If you want to be extended for another 5 years, so 5 plus 3, plus 5, a total of 13 years, you know, the time allotted for this downstreaming,” he said.

According to him, if the government continues to do the same, it can set a bad precedent. He considered that the government actually showed disobedience and inconsistency with the laws and policies that they made themselves.

Meanwhile, legal observer at Tarumanegara University, Ahmad Redi said the government’s inconsistency in establishing rules can also be seen from the lack of guidance and supervision over smelter construction. “In addition, there is also no facilitation in the form of incentives and obstacles in the form of optimal disincentives from the government,” he said.

In Media, Media Coverage | PWYP Indonesia | September 26th , 2016