Apr

14

Goverment Reopens Raw Mineral Export

Indonesia is rich in natural resources, and one of them is nickel which is the raw material for the manufacture of lithium batteries in electric cars. Nickel is one of the prime mining commodities forecasted to experience a supercycle phase, due to the massive growth of electric vehicles in the future. The high demand for nickel-based commodities might impact the price increase of this mining commodity. This scenario is highly profitable for Indonesia as a country, and the opportunity should be well utilized.

Before the outbreak of Covid-19, the government allowed exports of only high-grade nickel or its derivative products. However, due to the economic slowdown worldwide because of the pandemic, the mining sector resulted in a decline and affected the trade of nickel commodities.

Although there is currently a tendency to increase the price of nickel commodities, it is predicted not to last long. If the pandemic continues for a further period, then the long-term impact will be directly on the prices of nickel commodities, and it will continue to fall.

One of the government’s economic policies that can be pursued is by relaxing norms in the area of taxes, credits and incentives, including the sector of Mineral and Coal Mining, and especially nickel commodities, because they can generate foreign exchange. There is a need for government support for exports of metal minerals to foreign countries.

The Indonesian government, through Mr.Arifin Tasrif, the Minister of Energy and Mineral Resources, opened the raw mineral exports. The reopened raw minerals are bronze concentrate, iron concentrate, zinc concentrate, manganese concentrate, and bauxite. This order is in accordance with the Circular Letter of Director General of Mineral and Coal Mining, Mr.Ridwan Djamaludin, Number 1.E/MB.04/DJB/2021 on Recommendations for Overseas Sales of Metal Minerals during the 2019 Corona Virus Disease Pandemic (COVID-19).

In connection with the Decree of the Minister of Energy and Mineral Resources Number 46.K/MB.04/MEM. B/2021 on Recommendations for Overseas Sales of Metal Minerals during the 2019 Corona Virus Disease Pandemic (COVID-19) on March 12, 2021, governs the requirements that will support the sales to foreign countries for metal minerals, and here are some important points:

  1. Recommendations on overseas sales of metal minerals during the COVID-19 pandemic as referred to in the Decree of the Minister of Energy and Mineral Resources Number 46.K/MB.04/MEM. B/2021 on Recommendations for Overseas Sales of Metal Minerals during the 2019 Corona Virus Disease Pandemic (COVID-19), is only given for certain metal mineral commodities, among others:
    1. bronze concentrate;
    2. iron concentrate;
    3. zinc concentrate;
    4. manganese concentrate;
    5. bauxite that has been washed bauxite with Al2O3 content > 42% (more than or equal to forty-two percent).

  2. Holders of Production Operations Mining Business License of Metal Mineral and Special Production Operations Mining Business License of Metal Mineral that do not meet the percentage of physical progress of the construction of refining facilities at least 90% (ninety percent) in the 2 (two) period of evaluation of physical progress of the construction of refining facilities since the issuance of Presidential Decree No. 12 of 2020 concerning the Determination of Non-natural Disasters the Spread of Corona Virus Disease 2019 (COVID-19) as a National Disaster, can be given recommendations of export approval, while still subject to administrative fines of the cumulative value of sales abroad in the evaluation period, in accordance with the provisions in Regulation of the Ministry of Energy and Mineral Resources Number 25 of 2018 concerning Mineral and Coal Mining Business junco Regulation of the Ministry of Energy and Mineral Resources Number 17 of 2020 concerning The Third Amendment to Regulation of the Minister of Energy and Mineral Resources Number 25 of 2018 concerning Mineral and Coal Mining Business.
The Decree of the Ministry of Energy and Mineral Resources Number 46.K/MB.04/MEM.B/2021 on Recommendations for Overseas Sales of Metal Minerals during the 2019 Corona Virus Disease Pandemic (COVID-19) is one of the ways of the government to increase the production and the value of metal mineral commodities, which is also the mission of Schinder Law Firm. Should you need to have a legal consultation related to raw mineral exports and its implementing regulations, please do not hesitate to contact us or drop us an email at info@schinderlawfirm.com.

Source: Ministry of Energy and Mineral Resources

Book a Free Consultation