Indonesia has implemented a new law banning the export of mineral ores. From this month, all mining companies must refine their ores before they can be exported. Infrastructure weaknesses, however, render such restriction highly unviable for many companies.

INDONESIAN MINING companies have been in a curious quandary since the start of the new year as the government implements a ban on the export of unprocessed mineral ores. Mining companies are required to refine their minerals before they can be exported or sold in the international market.

The ban was originally designed to encourage local mining companies to process raw mineral ores so as to increase their value-add, thus yielding higher export revenue. However, it is becoming evident that this law would instead have a downside effect due to the lack of funds to build smelters as well as deficiencies in supporting infrastructure within the industry.

… Keoni Indrabayu Marzuki is a Research Associate of the Indonesia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University.