As reported in our last newsletter, the Republic of Indonesia implemented a planned ban on the export of unprocessed mineral ore, with some exceptions. On 11 January 2014, the Minister of Energy and Mineral Resources (MEMR) provided exceptions from the ban for copper, manganese, iron ore, lead, and zinc concentrates. The exceptions are in place for only three years, however, and are conditioned on a commitment to construct smelters in Indonesia. No such exceptions exist for other minerals, like nickel, tin, gold, silver, or chromium.
The ban was intended to promote the development of smelting capacity in Indonesia. Indeed, Freeport-McMoran Copper & Gold and PT Aneka Tambang (Antam) have agreed to study construction of a copper smelter in Indonesia. That study will take at least three months. Even if companies agree to construct smelters, as opposed to exiting Indonesia or curtailing operations, the ban could have a significant adverse effect on the Indonesian economy.