ANNOUNCEMENT 06 Feb 2012In February 2012, the government of Indonesia announced an altered export prohibition.
NUMBER OF INTERVENTIONS
ESDM Regulation no. 07/2012 (in Bahasa Indonesia): http://prokum.esdm.go.id/permen/2012/Permen%20ESDM%2007%202012.pdf
Baker & McKenzie Client Alert March 2012, 'Curtains closed on Indonesian ore exports' with an explanation of the regulation in English: http://www.bakermckenzie.com/files/Publication/c1348f4f-7234-4090-9ece-953841f36bed/Presentation/PublicationAttachment/40e24e1a-f361-4b8d-9b93-9fa8be322109/al_ap_indonesianoreexports_mar12.pdf
On February 6, 2012, the Indonesian Ministry of Energy and Mineral Resources (ESDM) issued Regulation no. 7/2012, which entered into effect on May 6, 2012.
It prohibits the export of unprocessed metals and non-metallic minerals without submitting a notification to the government concerning their plans for smelter construction. This in effect requires firms to locate their processing plants on Indonesian territory and bans the export of unprocessed minerals and metals.
This export ban is already written down in the Mineral and Coal Mining Law from 12 January 2009, article 107:
'The holders of contract of work as referred to in Article 169 thathave engaged in production shall conduct purification as referred to inArticle 103 paragraph (1) no later than 5 (five) years after this lawhas been promulgated. ' (article 107)
Article 102 & 103 describe adding value to mineral and coalresources as processing and purification activities. It is thereforenecessary that mining companies do not only export raw materials butprocess the raw ore within the country.