The Indonesian Chamber of Commerce and Industry (KADIN) has warned the government of the possibility of more layoffs in the mining sector as a result of a ban on mineral ore exports and increased export duties on semi-finished mineral concentrates.
Didie W. Soewondho, KADIN’s mineral downstream taskforce chief, estimated that around 100,000 out of 400,000 - 600,000 workers will lose their jobs due to the above said difficulties.
As the government wanted to increase the added value of export products and boost the domestic processing industry, it implemented the ban on the export of raw materials last month and will increase the export tax on semi-finished mineral concentrates to 60 percent by 2016 from the current 20 percent.
The export duties are seen as too high as the profit margin for semi-finished minerals is only about 10 to 15 percent of revenue, according to KADIN, which suggested the rate should be reduced to five percent.
Finance Minister Chatib Basri has said that the export duties were part of efforts to ensure mining companies meet the obligation to process minerals domestically as stated in the 2009 Mining Law.
He noted that by now only one processing facility of the state-owned PT Aneka Tambang was finished and ready to absorb bauxite and process it into alumina.
Figures from the Investment Coordinating Board (BKPM) showed the mining industry would need around 150 trillion Rp (14.3 billion USD) in investment for mineral smelting and refining plants in order to shift to processing.-VNA
Didie W. Soewondho, KADIN’s mineral downstream taskforce chief, estimated that around 100,000 out of 400,000 - 600,000 workers will lose their jobs due to the above said difficulties.
As the government wanted to increase the added value of export products and boost the domestic processing industry, it implemented the ban on the export of raw materials last month and will increase the export tax on semi-finished mineral concentrates to 60 percent by 2016 from the current 20 percent.
The export duties are seen as too high as the profit margin for semi-finished minerals is only about 10 to 15 percent of revenue, according to KADIN, which suggested the rate should be reduced to five percent.
Finance Minister Chatib Basri has said that the export duties were part of efforts to ensure mining companies meet the obligation to process minerals domestically as stated in the 2009 Mining Law.
He noted that by now only one processing facility of the state-owned PT Aneka Tambang was finished and ready to absorb bauxite and process it into alumina.
Figures from the Investment Coordinating Board (BKPM) showed the mining industry would need around 150 trillion Rp (14.3 billion USD) in investment for mineral smelting and refining plants in order to shift to processing.-VNA
