Some mining executives on Tuesday voiced concerns about the export ban on certain raw materials set to take full effect in 2014, with officials from the Chamber of Commerce and Industry and copper and gold miner Freeport Indonesia singling out certain aspects of the regulation.
Natsir Mansyur, the deputy for logistics at the business group known as Kadin, identified in a statement on Tuesday alleged inconsistencies over the introduction date of some parts of the policy, which he said were confusing.
Rozik B. Soetjipto, the new president director of Freeport Indonesia, told the Jakarta Globe that developing a copper smelter and refinery like the one owned by a subsidiary of the company in Gresik, East Java, was costly and took at least six years from a feasibility study to the end of the construction period.
Freeport Indonesia owns a 25 percent stake in Smelting, the company that operates the Gresik smelter. Other shareholders include Mitsubishi Materials Corporation Unimetals and JX Nippon Mining & Metals.
“Talking about building a smelter [means] we have to talk about a feasibility study,” he said, adding that the Gresik project cost about $1.2 billion.
He said the Gresik smelter currently absorbed only about 30 percent of the company’s ore mining product, meaning the rest of its concentrate output was exported.
He said the regulation was not practical for copper smelting. “We have to look at each commodity differently because of different processing,” he said.
Thamrin Sihite, an official at the Ministry of Energy and Mineral Resources, has said the regulation would encourage the establishment of dozens of smelters.
Additional reporting by Investor Daily