This content is from: Local Insights

Indonesia’s end to mineral export ban

Oene MarseilleEmir Nurmansyah
The Ministry of Energy and Natural Resources has recently issued the second amendment to Rule 7 of 2012 regarding Increasing Mineral Resources Value Through Processing and Refining (Rule 7), in the form of Rule 20 of 2013 (the second amendment).

The second amendment effectively put a date on the ban, which is now set at January 12 2014. Previously, the export ban, which was set at May 2013, was lifted through the first amendment to Rule 7, with the condition of obtaining several requirements including the recommendation of the Ministry of Energy and Natural Resources. The second amendment added another requirement to the list: the recommendation for the Ministry of Trade, or an appointed government official in accordance with the prevailing regulations.

The other requirements are relatively similar to the first amendment: obtaining a clean-and-clear status; paying financial obligations to the state; delivering working or cooperation plans for domestic processing or refinery; and, signing of the integrity pact.

Finally, the second amendment also revised the minimum specifications of processed and refined minerals that are allowed to be exported, and the methods of conducting joint processing with other parties in fulfilling the processing and refinery obligations. Also revised was the division of authority when granting approval to commence the joint processing between the Ministry of Energy and Natural Resources, the governor and the mayor or regent, in accordance with the parties involved and the issuer of the licences of such parties (whether it was the minister, governor or the mayor/regent).

The second amendment comes with no surprises, due to the fact that the ban itself was already laid out in Government Regulation 23 of 2010 regarding the Activities of Mineral and Coal Mining, which stipulates that domestic processing and refining shall start at the latest five years after the enactment of Law 4 of 2009 concerning Mineral and Coal Mining. Rule 7 (and the first amendment) is of course subordinate in the Indonesian regulatory hierarchy compared to the government regulation, and therefore should not be in conflict with higher regulations.

Oene Marseille and Emir Nurmansyah

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