Sign up | Log in



Home  >>   Daily News  >>   Indonesia  News  >>   Commodities  >>   Miners say Indo value-added law will hurt
NEWS UPDATES Asean Affairs        8  March 2011

Miners say Indo value-added law will hurt

Related Stories

February 3, 2011
Foreigners in search of Indo gold

January 3,2011
Inflation may dull Indonesian outlook

December 21, 2010
GM relocates marketing to Indonesia

October 27, 2010
Indo car sales outstrip road capacity

Government plans to require miners to give added value to their exported commodities could end up costing the country income, a mining association official said on Monday.

Priyo Pribadi Sumarno, an executive director at the Indonesian Mining Association, said the domestic market for minerals such as tin, gold, copper and nickel was relatively small compared to the export market.

“We support the idea of giving added value to our commodities, but requiring these added values as a requirement for export will be more problematic and it will reduce export revenue,” he said.

A 2009 mining law requires miners to upgrade their mineral commodities, with mineral producers needing to comply by 2014 and coal producers by 2016.

Priyo said the law would require local miners to process their commodities before exporting them. Companies would export ferronickel instead of raw nickel, for example, while copper would be required to have 99 percent metal content and coal at least 5,600 calories.

Exports of tin, Indonesia’s top commodity, would have to be 99.85 percent metal.

To meet that requirement, he said, companies would have to invest more in technology by building or upgrading their smelters. A simple smelter could cost about $50 million, while a more advanced smelter could cost at least $500 million.

“The government’s attempt to boost the downstream mineral sector might cost the miners themselves,” Priyo said. “Also, the basis for these added-value requirements is still unclear and we’re pessimistic that the domestic market can absorb most of these commodities.

“I don’t think the regulation is necessary for coal, which accounts for more than 80 percent of our mineral exports, because coal already has its own domestic market obligation.”

According to data from the Central Statistics Agency (BPS), Indonesia’s mining sector was worth $26.67 billion last year, making up 17 percent of total exports.

Priyo said his association would ask the government to review the value-added law and recommend that the plan be implemented in phases while miners upgraded their downstream capability.

“The domestic demand for minerals is too small to absorb the potential excess of commodities,” he said. “If this regulation is enforced, big companies like Newmont, Aneka Tambang and Inco will be the ones affected the most.”

Gold miner Newmont Nusa Tenggara, a local unit of the giant US firm, said complying with the value-added law could prove to be problematic.

“We understand the spirit of the law, but our studies have shown that building a smelter is not economically feasible,” Kasan Mulyono, NNT’s spokesman said.

“Currently, there is a global shortage on smelter supplies as many smelters are operating under their capacity.”

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Today's  Stories    8  March 2011 Subsribe Now !
• Cambodian villagers halt land clearing
Subcribe: Asean Affairs Global Magazine
• Fuel Subsidy Ban’s Fate to Be Decided Today Asean Affairs Premium
• Miners say Indo value-added law will hurt

• High-speed KL-Singapore rail to be studied

Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Philippines forex reserves jump

• Japan advises Thailand to boost labor skills

• Thai women rise in business world

• Vietnam sets Mekong Delta priorities

Asean Analysis    7   March 2011 Advertise Your Brand
• Economic pressures raise political tensions Sponsor Our Events
Asean Stock Watch    8  March 2011
• ASEAN to Hold Gains
Global News Impacting Asia    17 November 2010
• Bank of America sees Asian inflation
• Lloyd’s increases insurance push in Malaysia
• Wells Fargo analyst on euro
• Obama’s visit to Asia

ASEAN NEWS UPDATES      Updated: 04 January 2011

• Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2021 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand