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Having squandered several years’ opportunity to bring them in line with a law enacted in 2009, mining companies and associated businesses are lobbying for a regulation in lieu of a law (Perpu) to provide an extension to the 2014 deadline after which raw mineral exports are prohibited.

 

Paradoxically for a company which stands to benefit most from the law, PT Smelting, which runs Indonesia’s only copper smelter at Gresik, in East Java, has claimed it may cease operations next year as it cannot guarantee one of its two suppliers will continue mining after the export ban comes into effect.

 

One of PT Smelting’s two suppliers, Newmont Nusa Tenggara, said in a internal memorandum in September that closure of its mine on Sumbawa was a viable option if the company could not continue to export raw ores. PT Smelting’s complaint came despite the fact that the Gresik copper smelter receives most of its feedstock from Papua’s Freeport mine, one of the world’s largest copper mines and which no-one has suggested is about to close.

 

“We hope the government will act wisely and we are ready to cooperate to find a solution,” said Makoto Miki, PT Smelting’s president director.

 

Miki was speaking at a seminar in Jakarta on Thursday, hosted by the Islamic Students Alumni Association (Kahmi).

 

Miki said that should the Gresik smelter halt operations, it would disrupt supplies to other manufacturers that rely on its outputs, such as electrical cable producers, and its sulfuric acid by-product, such as fertilizer firms.

 

“We want the government to issue the regulation [Perpu] as soon as possible. No more discussion,” said Satya W. Yudha, a member of the House of Representatives’ Commission VII, which oversees energy and mineral resources issues.

 

Mahfud MD, Kahmi’s chairman and former Constitutional Court chief justice, said that the government should issue a perpu, to extend the deadline to allow mining companies to resume operation. “It should not be too difficult,” Mahfud said.

 

However, the need to extend the deadline underlines both the arrogance of the country’s mining industry, which refuses to accommodate the government’s value-adding policy, and, Mahfud said, a problem with government administration, which did not ensure the industry’s compliance. “The government did not respond to the new law immediately and seemed to take it lightly,” Mahfud said.

 

“Now, when it’s close to deadline, we have all this fuss,” he said.