Indonesia's controversial Mining Law No.4/2009, which puts a ban on exports of unprocessed minerals from Southeast Asia's largest economy, is not expected to be implemented in full force on 12 January 2014 as the Ministry of Energy and Mineral Resources now proposes more flexibility for miners. Sukhyar, General Director of Coal and Minerals at the Ministry, said that the proposal would imply a continuation of the export of concentrate or minerals that have been processed to a certain degree until 2017.

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Indonesia's state news agency Antara reported that the government may review its Mining Law No.4/2009 which stipulates a ban on the export of raw minerals. This controversial new law, through which the government aims to raise more value-added revenues, caused a shockwave across Indonesia's mining sector because a significant amount of mineral exports constitute unprocessed ones. The law, which is set to be implemented on 12 January 2014, implies that minerals need to be processed domestically first before exports are allowed.

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Although the ban on the export of unprocessed minerals, which is set to start on 12 January 2014, is expected to result in a direct revenue loss of USD $4 billion in 2014 due to a decline in mineral exports, Deputy Finance Minister Bambang Brodjonegoro believes that from 2016 onward a trade surplus can be recorded in Indonesia's minerals sector. In 2014, Indonesia's minerals sector may show a USD $10 billion trade deficit. But exports of processed minerals may grow from USD $4.9 billion in 2013 to USD $9 billion in 2015.

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Today (08/12), the latest edition of our newsletter was published. Our newsletter contains the most important economic, political and social news stories from Indonesia that were reported on in the last seven days. This is of especial importance for those that engage in business in Indonesia or those that are interested to invest in Southeast Asia's largest economy as it will provide a thorough update about Indonesia's macroeconomy. Occasionally, our newsletter also contain event announcements.

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On 10 June 2023 the Indonesian government imposed a ban on bauxite ore exports in a bid to encourage the development of a domestic bauxite processing and refining industry. This move was not a surprise. Over the past couple of years, government officials had mentioned their desire to ban bauxite ore exports from June 2023. And in December 2022 it was Indonesian President Joko Widodo himself who reaffirmed this ambition.

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On 21 December 2022 Indonesian President Joko Widodo stated that the Indonesian government will ban exports of bauxite ore starting from June 2023 in an effort to encourage the development of a domestic bauxite processing and refining industry.

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The Indonesian Mining Institute (IMI) is concerned about foreign perceptions of Indonesia's mining sector. According to the Fraser Institute, a Toronto-based public policy research and educational organization, Indonesia now ranks lowest in terms of the "state of the investment climate in the mining sector across the world". A new survey, conducted by the Canadian think-tank, shows that Indonesia's recently introduced government policies (stemming from the New Mining Law) that affect the activities in the mining sector has seriously undermined foreigners' confidence in a conducive investment climate in Indonesia's mining sector.

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Uncertainty about the continuation of the company's copper concentrate exports could imply that Freeport Indonesia needs to terminate operations at the Grasberg mine in Papua. Currently, shipments of copper concentrate from the mine to the smelter in Gresik (East Java) have ceased, while the company's storage facilities are full to the brim. Part of workers at the Grasberg mine have been sent home as the processing plant has not been producing any concentrate since Friday (10/02).

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On Thursday (12/01) the government of Indonesia said it eased regulations concerning the controversial ban on exports of metal ore and concentrates of other minerals. Based on the New Mining Law that was revealed in 2009, Indonesian shipments of mineral ore would be banned starting from January 2014. This policy was designed in order to boost the development of domestic processing facilities (smelters) and become an exporter of value-added mining products (hence becoming less vulnerable to volatile prices of raw materials).

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Indonesia is currently discussing the revisions that need to be made to the 2009 Mining Law (Law No. 4/2009 on Mineral and Coal Mining). As there is a lack of progress with the development of smelting (processing) facilities in Indonesia, authorities may decide to postpone the full implementation of the ban on exports of unprocessed mineral ore by five years. Initially, this ban was supposed to come into effect in January 2014. However, it was pushed back to 11 January 2017 to allow more time for smelter development in Southeast Asia's largest economy.

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It remains unclear whether Indonesia will revise the export ban that is stipulated by the 2009 Mining Law (Law No. 4/2009 on Mineral and Coal Mining) and is supposed to come into effect on 12 January 2017. The 2009 Mining Law stipulates a ban on the export of unprocessed and semi-processed ores from Indonesia. The regulation aims to boost development of the nation's smelting capacity, hence becoming an exporter of materials that are positioned higher up in the value chain while curbing Indonesia's current dependence on exports of raw materials.

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Freeport Indonesia has requested for a recommendation from Indonesia's Ministry of Energy and Mineral Resources to obtain another six-month permit for the export of copper concentrate. The existing permit expires on 8 August 2016. Since Indonesia's ban on mineral ore exports was implemented in January 2014, Freeport Indonesia - subsidiary of US-based natural resources company Freeport McMoRan Copper & Gold Inc - has been required to obtain six-month permits in order to continue shipments of copper concentrate.

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According to the Association of Indonesian Processing and Refining Companies (AP3I), consumption of mineral ores in Indonesia will be solid starting from 2017 due to the start of operations of new smelters. Jonathan Handojo, Vice Chairman of the AP3I, says domestic consumption of nickel ore will reach 7 million tons in 2017, roughly the same amount of nickel ore that was exported in 2009 before the New Mining Law - which stipulates a ban on exports of mineral ore from Indonesia (per January 2014) - was revealed.

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The government of Indonesia is yet to find a middle way between encouraging the development of processing facilities for the country's mining output and the relaxation of mineral ore exports. Based on Law No. 4/2009 on Mineral and Coal Mining (New Mining Law), exports of mineral ore should have been fully banned in 2014. However, due to the lack of domestic smelting capacity a last-minute regulation was signed in early January 2014 by former Indonesian President Susilo Bambang Yudhoyono that softened this ban.

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