Mining update: Indonesian ore ban — temporary relief but at a price
As is widely known, the Indonesian export ban on ore came into effect on 12 January 2014. The regulation has caused commotion in the industry and the Indonesian government was under pressure to alleviate some of the harsher consequences. At the last minute, the Indonesian government has announced certain relief measures. However, these measures are intended to be temporary and, in exchange for the relief, the government is also seeking to raise export taxes.
The processing requirement for a number of ores has been adjusted. As long as the processing requirements are met, the ores can be exported. The most significant amendment is the lowering of the processing requirement for copper concentrate. Under the 2014 regulations, copper ore would need to be processed into copper cathodes of 99.9 per cent purity. Miners will now be allowed to export copper concentrate containing at least 15 per cent nickel. This allows Indonesia’s largest copper exporters, Freeport McMoRan Copper and Gold and Newmont Mining (which together account for 97 per cent of Indonesia’s copper exports) to benefit from the amendments, since their copper concentrate already exceeds the 15 per cent minimum requirement.
The requirements for nickel pig iron have been lowered to four per cent (previously six per cent)…
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