Why Indonesia Keeps Putting off Its Export Ban

Oct 12, 2016 | 09:15 GMT
Why Indonesia Keeps Putting off Its Export Ban
The Grasberg mining complex, one of the world's biggest gold and copper mines, in the Indonesian province of Papua in 2013. Jakarta has announced a possible extension of a ban on exports of raw and semi-processed metal ores.

After struggling to grow its domestic smelting capacity, the Indonesian government has announced its plan to revise a ban on raw and semi-processed metal ore exports that was supposed to take effect in January 2017. Under the proposed changes, miners who have built or who are building smelters in Indonesia may continue to export metal concentrates for another three to five years, subject to a progressive tax. Some miners will welcome the move, and Jakarta will certainly welcome the extra income gained from leveling additional taxes on resource exports. But the measure could also erode investors' confidence in the government's ability to implement mining regulations. Moreover, relaxing the ban will hurt companies that have made substantial investments in developing stand-alone smelters and the infrastructure to support them....

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