Minews - Indonesia says may delay 2017 ban on copper concentrate exports

(Minews) - Indonesia could push back a ban on exports of copper and other mineral concentrates due to come into effect in January 2017 if miners have not built new domestic smelters in time, a mining ministry official said on Wednesday.

Early last year Southeast Asia's largest economy put in place export restrictions aimed at forcing mining firms to develop smelting and processing facilities so that Indonesia could refine all of its own raw ores and concentrates.

"If it's not built by 2017 this could have consequences for the regulations," Coal and Minerals Director General Sukhyar told reporters after meeting with copper miners including U.S. companies Freeport-McMoRan Inc and Newmont Mining Corp to discuss compliance with the smelting rules.

"In Papua alone it will take five years until 2020 (to build a smelter)," he said. "So there's a possibility the regulation will be revised to extend exports beyond 2017."

Sukhyar noted that while the deadline for full domestic processing could be extended for other metal concentrates, exports of unprocessed nickel and bauxite would remain banned.

Last year, U.S.-based miners Freeport and Newmont, which account for 97 percent of Indonesia's copper output, faced lengthy export stoppages related to the rules.

Both companies eventually clinched deals to resume exports, but they had to present their plans for full domestic processing of their mining output by 2017 within six months.

Earlier this week, Indonesia dropped its demand for Freeport to build a $1.5 billion copper smelter in Papua province, saying a regionally owned enterprise would take on the project instead.

Freeport's planned expansion of Indonesia's sole copper smelter at Gresik, part owned by Mitsubishi Materials Corp , could be completed by 2017, said Sukhyar. But he added that it was not feasible for all 72 of Indonesia's copper miners to develop copper smelters independently.

"There is no option but for them to work together," Sukhyar said, adding that the government would assist where possible.

Further details on the miners' joint smelter plans are expected to be discussed at a meeting on Friday, he said, adding that Freeport's Gresik smelter expansion plans may be changed.

Indonesia's copper concentrate production is expected to exceed 2.2 million tonnes in 2018, Sukhyar said.