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May 7, 2008

Govt to tighten mineral export rule

Indonesia will clamp down on the suspected smuggling of minerals including bauxite, nickel and copper, by enforcing strict inspections of exports with effect from July, a senior trade official said on Tuesday.

Southeast Asia's biggest economy has rich deposits of coal, copper, gold, tin, and other minerals. But with its 17,000 or so islands, vast area, extensive coastline and difficult terrain, Indonesia is concerned about smuggling and the resulting loss to state coffers.

Strong demand from China and India for commodities has pushed up prices, increasing the opportunities for smugglers.

In future, Indonesia's mineral exports must be verified by independent surveyors before they are loaded aboard ships for sale overseas, said Diah Maulida, Director General of Foreign Trade at the Trade Ministry.

"If we have accurate data, it will help good mining practices, including minimising environmental damage and illegal exports of mining products," said Maulida, adding that the new policy would come into effect on July 5.

"Mining companies are scattered across the country and are located in remote areas. So we think two months is sufficient (time) to introduce the new policy," Maulida said.

Mining products which will be verified before export include coal, nickel ores and concentrates, copper ores and concentrates, as well as bauxite. Surveyors will check the shipping documents, volumes, and type of mining or mineral product, as well as the loading and destination ports.

Indonesia has stepped up its monitoring of mineral exports in recent years, following the boom in commodity prices, and the authorities have detained shipments of granite and bauxite destined for other Asian countries on several occasions.

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