Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Kartini L Makmur, Robert Sidauruk
Haunted by the lack of infrastructure and Government assistance, all Indonesian mining companies that are parties to Contracts of Work (Kontrak Karya) now have less than two months to establish smelters if they are to comply with mandatory domestic mineral and coal purification requirements.
This obligation was established by Article 170 of Law No. 4 of 2009 on Mineral and Coal Mining (Mining Law), which states that all mineral and coal companies must perform purification processes in Indonesia. Thereafter, the Minister of Energy and Mineral Resources issued Regulation No. 20 of 2013, which prohibits mining companies from exporting raw minerals as of 12 January 2014, including for purification purposes.
These circumstances are a burden for almost all mining companies operating in Indonesia. Makato Miki, President Director of PT Smelting Gresik, commented that inadequate infrastructure is the biggest hindrance to realizing the domestic purification objectives. Makato also believes that if the Government forces the implementation of this policy, it will put the future of many companies in jeopardy.
“If the Government continues with the policy, it will be difficult to run purification activities due to the lack of minerals and coal supplies from upstream industries,” added Makato.
Makato also highlights the importance of Government assistance to encourage investors to establish more smelters. As this is a business with high investment costs, Makato asserts that investors consider the smelting business as an unprofitable investment unless the Government offers attractive incentive schemes and competitive tax concessions.
In addition to burdening mining companies, the domestic purification process policy and export ban is predicted to also have a negative domino effect on other dependent industries, such as cable manufactures.
According to Noval Jamalullail, Head of the Indonesian Cable Manufacturers Association, many cable producers are still importing raw minerals even though the policy is not being enforced yet. If the policy comes into force, this will result in a rise in import costs.
To overcome this, Didie Soewondho, Head of the Minerals Task Force at the Indonesian Chamber of Commerce, suggests mining companies submit a proposal to the Government outlining the main problems if the policy is implemented and include details of the Government assistance that is required.
“For instance, if the Government provides assistance to a mining company, that company can find investors for downstream industries in return,” commented Didie.
(hot/kc)
Kartini L Makmur, Robert Sidauruk
Haunted by the lack of infrastructure and Government assistance, all Indonesian mining companies that are parties to Contracts of Work (Kontrak Karya) now have less than two months to establish smelters if they are to comply with mandatory domestic mineral and coal purification requirements.
This obligation was established by Article 170 of Law No. 4 of 2009 on Mineral and Coal Mining (Mining Law), which states that all mineral and coal companies must perform purification processes in Indonesia. Thereafter, the Minister of Energy and Mineral Resources issued Regulation No. 20 of 2013, which prohibits mining companies from exporting raw minerals as of 12 January 2014, including for purification purposes.
These circumstances are a burden for almost all mining companies operating in Indonesia. Makato Miki, President Director of PT Smelting Gresik, commented that inadequate infrastructure is the biggest hindrance to realizing the domestic purification objectives. Makato also believes that if the Government forces the implementation of this policy, it will put the future of many companies in jeopardy.
“If the Government continues with the policy, it will be difficult to run purification activities due to the lack of minerals and coal supplies from upstream industries,” added Makato.
Makato also highlights the importance of Government assistance to encourage investors to establish more smelters. As this is a business with high investment costs, Makato asserts that investors consider the smelting business as an unprofitable investment unless the Government offers attractive incentive schemes and competitive tax concessions.
In addition to burdening mining companies, the domestic purification process policy and export ban is predicted to also have a negative domino effect on other dependent industries, such as cable manufactures.
According to Noval Jamalullail, Head of the Indonesian Cable Manufacturers Association, many cable producers are still importing raw minerals even though the policy is not being enforced yet. If the policy comes into force, this will result in a rise in import costs.
To overcome this, Didie Soewondho, Head of the Minerals Task Force at the Indonesian Chamber of Commerce, suggests mining companies submit a proposal to the Government outlining the main problems if the policy is implemented and include details of the Government assistance that is required.
“For instance, if the Government provides assistance to a mining company, that company can find investors for downstream industries in return,” commented Didie.
(hot/kc)