Indonesia to revise mineral export tax rules, give Freeport export permit

FE Team | Published: July 25, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

JAKARTA, July 24 (Reuters): Indonesia will revise its rules on mineral export taxes next month, a senior official said on Thursday, paving the way for the country's multi-billion dollar mining industry to rebound after months of layoffs and stalled exports.
Deputy Finance Minister Bambang Brodjonegoro told Reuters the new rules on mineral export taxes would be issued in August but gave no other details.
Earlier, other officials said the government was close to an agreement with Freeport-McMoRan Copper & Gold Inc, the biggest mining company in the country, that would allow it to resume copper exports.
The controversial escalating tax on mineral concentrate exports was introduced in January along with a ban on unprocessed ore exports. The rates are different for each company, and Arizona-based Freeport appears to have reached an agreement on what it will pay.
The ban on unprocessed ore exports will remain in place.
The new rules resulted in hundreds of thousands of layoffs and halted $500 million of exports a month from Southeast Asia's biggest economy and one of the world's most resource-rich nations, according to government and industry sources.
Despite the agreement with Freeport and the move toward revising the export tax rules, the government had harsh words for another US miner, Newmont Mining Corp, and said it would take stern action against the company over the dispute.
The two are Indonesia's top copper miners, and account for 97 per cent of the nation's copper output. They have taken divergent paths in dealing with the government over the rules.
Freeport is close to completing necessary steps to qualify for an export permit, chief economics minister Chairul Tanjung told reporters. Coal and Minerals director general Sukhyar now had legal grounds to sign an memorandum of understanding (MOU) with the firm as a necessary step before it could obtain an export permit, Tanjung said.
While Freeport had engaged in behind-the-scenes talks, Newmont suspended operation at its Batu Hijau mine and filed for international arbitration.
"The government will take stern action towards Newmont," Tanjung quoted President Susilo Bambang Yudhoyono as saying.
He said also that Yudhoyono referred to the firm as "not valuing working on Indonesian soil, the birthplace of Indonesia's ancestors."