indonesia mining policy shift sparks fresh turmoil
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice
Emiratesvoice, emirates voice
Last Updated : GMT 05:17:37
Emiratesvoice, emirates voice

Indonesia mining policy shift sparks fresh turmoil

Emiratesvoice, emirates voice

Emiratesvoice, emirates voice Indonesia mining policy shift sparks fresh turmoil

Jakarta hopes a policy u-turn
Jakarta - AFP

 A controversial U-turn on mineral exports has sparked turmoil in Indonesia's key mining sector, providing a fresh headache for firms struggling to work in Southeast Asia's biggest economy.
Despite sitting atop some of the world's most abundant natural resources, successive governments have failed to take advantage of its vast riches, with critics blaming badly thought-out and nationalistic policies that make the country an uncertain place to invest.
And the latest overhaul has sparked a potentially damaging standoff with one of the United States' biggest miners and a major investor in the country.
Jakarta in January relaxed a 2014 landmark ban on shipments of raw mineral ores, which was originally aimed at spurring the domestic smelting industry but led to mine closures, job losses and a fall in government revenues.
While some firms may stand to benefit from the sudden rollback, it has infuriated companies that invested large amounts in Indonesia on operations for smelting, the process of extracting metals from their ores.
In addition, the government asked firms to sign new permits that critics say offer less protection -- triggering a standoff with US giant Freeport-McMoRan, which has stopped shipments from its huge copper and gold mine in the east.
The move is the latest in a series of regulatory changes from the government that have caused jitters among miners, with some foreign firms choosing to exit Indonesia rather than deal with such an unpredictable environment.
"One of the inherent problems in the Indonesian mining industry over the last few years has been the lack of consistency in government policy, with the government changing its mind quite regularly and unexpectedly," Bill Sullivan, a Jakarta-based lawyer and mining expert, told AFP.
Authorities have raised taxes and royalties on shipments and demanded that foreign miners reduce the stakes in their Indonesian operations to less than half.
- Heading for the exit -
In June US gold mining giant Newmont sold its share in an Indonesian mine to local investors after more than three decades operating in the archipelago, citing more onerous regulations as a factor.
And Rio Tinto, the world's second-biggest miner, is reportedly considering walking away from its stake in Freeport's vast Grasberg mine in Papua province owing to the current row.
Economic nationalists have pushed putting stricter conditions on foreign firms in a bid to reap greater profits from the industry, but critics fear the moves could backfire by scaring off investors at a time policymakers are already struggling to reignite slowing economic growth.
As resource-rich nations benefit from a jump in commodity prices after years of declines, the regulatory uncertainty means Indonesia may not fare as well. 
The latest policy change has sparked a fierce row with Freeport, which says it has given the government more than $16.5 billion in taxes and other payments since 1991.
The US miner has refused to bow to the government's demands to sign a new deal without additional assurances, stopped work at Grasberg -- the world's second-biggest copper pit -- started laying off workers, and threatened to sue the government.
"Right now we are at an impasse with the government," Freeport chief executive Richard Adkerson said during a visit to Jakarta last month.
Under the changes to Indonesia's export ban, miners will be able to export nickel ore and bauxite as well as concentrates of other minerals under certain conditions, instead of having to process them in Indonesia.
The amendments went further than analysts had expected, although some exports are still banned.
For investors who have already ploughed money into constructing smelters, including many Chinese firms, the U-turn on the ban is a disaster.
"People who have invested millions of dollars in Indonesia can only pray now that the government will revoke the regulation," said Jonatan Handojo, executive director of Indonesia's main smelter industry association.
Despite the outcry, officials are unrepentant with the finance ministry predicting the reversal could boost government coffers by $3.12 billion in the next five years.
Even if the government does not hit such an optimistic target, the policy overhaul may still turn out to be a good thing in the long term, said mining expert Sullivan.
"Indonesia is clearly being forced to rethink its position regarding resource nationalism and focus more on economic reality," he said.


Source: AFP

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

indonesia mining policy shift sparks fresh turmoil indonesia mining policy shift sparks fresh turmoil

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

indonesia mining policy shift sparks fresh turmoil indonesia mining policy shift sparks fresh turmoil

 



GMT 07:28 2012 Wednesday ,22 February

Schools spend just £1 per pupil on religious lessons

GMT 12:26 2018 Thursday ,11 January

New Iran drug law saves thousands

GMT 09:46 2017 Friday ,29 December

Djokovic to face Bautista Agut in Abu Dhabi comeback

GMT 17:51 2017 Tuesday ,11 July

Five desktop yoga poses for workaholics

GMT 09:13 2017 Thursday ,02 November

Asthmatic school teacher takes up Dubai Fitness

GMT 08:17 2017 Wednesday ,20 December

Etihad Airways to suspend flights to Tehran

GMT 00:43 2017 Wednesday ,04 October

Employee safety top priority at Khalifa Port

GMT 02:37 2017 Wednesday ,28 June

718 Cayman S: Superstar Sportscar

GMT 11:18 2017 Saturday ,14 October

Coach Inc changes name to Tapestry

GMT 00:03 2016 Monday ,06 June

Women bagged only 1% of votes in RCCI elections

GMT 09:21 2012 Saturday ,07 January

Sheikh Saud Bin Rashid mourns the death of his Sister

GMT 21:18 2017 Saturday ,13 May

Prime Minister of Lebanon Arrives in Doha

GMT 10:17 2016 Wednesday ,13 July

Manny Pacquiao plans

GMT 20:49 2016 Saturday ,02 January

3 dead in Kabul restaurant suicide bombing

GMT 08:14 2017 Thursday ,08 June

Lynched Pakistani student did not commit blasphemy

GMT 11:06 2015 Saturday ,19 September

Presidency mourns death of Dubai ruler's son

GMT 16:34 2016 Sunday ,19 June

13 Daesh fighters killed in East of Afghanistan

GMT 12:18 2012 Saturday ,28 January

High school STEM students’ invention awarded patent

GMT 05:17 2017 Wednesday ,20 September

Custodian of the Two Holy Mosques directs KSRelief

GMT 12:57 2012 Wednesday ,25 April

UK education secretary says good grades are key
Emiratesvoice, emirates voice
 
 Emirates Voice Facebook,emirates voice facebook  Emirates Voice Twitter,emirates voice twitter Emirates Voice Rss,emirates voice rss  Emirates Voice Youtube,emirates voice youtube  Emirates Voice Youtube,emirates voice youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

emiratesvoieen emiratesvoiceen emiratesvoiceen emiratesvoiceen
emiratesvoice emiratesvoice emiratesvoice
emiratesvoice
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
emiratesvoice, Emiratesvoice, Emiratesvoice