TEMPO.CO, Jakarta - The government plans to ban the export of processed minerals by contract of work (COW) miners starting next year. If COW miners want to keep exporting, they are required to change their business licenses into the Special Mining Business License (IUPK).

The plan is set in the revision draft of Government Regulation (PP) No.23/2010 on Mineral and Coal Business Activities. Article 112 C point 1 will oblige COW holders to purify their mining outputs in Indonesia.

The Energy and Mineral Resources Ministry's Secretary General Teguh Pamudji said the revision is being discussed by the Coordinating Ministry for Economic Affairs.

The draft states that miners that transform their business licenses into IUPK will be given up to five years to export processed minerals, starting from the time the PP No.23/2010 was signed. The export license is also restricted to IUPK holders that are constructing smelters in Indonesia.

After that, any export activity will be charged with duties that are adjusted to the smelter construction progress. Smaller duties will be imposed to miners whose smelter developments are closer to completion.

The new rule will also require miners to pay higher amounts of financial obligations, such as royalties and taxes, which will vary depending on the government's fiscal policy. This is different from the financial obligations regulated in COWs, which are fixed and determined only by an agreement between the government and the respective mining company.

The Energy and Mineral Resources Minister's Regulation No.1/2014 states that the period for exporting processed minerals period will end on January 11, 2017. If no new policy is issued, the export ban will not only apply to COW holders, but also IUPK holders.

The Indonesian Mining Association (API) asked the government to cancel the proposal. API chair Ido Hutabarat said the rule violates the nail down principles upheld COWs. Contracts, said Ido, allow miners to export minerals.

"The government should respect the existence of the contract of work, at least until the period ends," Ido said.

Ido also objects to the government's plan to mandate smelter construction, citing not every miner has sufficient mineral resources to be processed in smelters. Employers will also have to bear twice the risk as they have conducted explorations.

Energy Minister Ignatius Jonan declined to elaborate on the matter. He only said his ministry will not rush into making decisions about the future of concentrate exports. "The decision will not be made until 2017," Jonan said.

ROBBY IRFANY