The Financial Times reported that Indonesia’s chamber of commerce has warned that if a planned ban on the export of raw minerals goes froward, the country’s mining industry will collapse. Many believe the government will ultimately change its mind about the ban.
As quoted in the market news:
‘If the government implements a full ban, the whole industry will collapse,’ given that there are only a handful of smelters in the country, warned Garibaldi Thohir, a vice-chairman of Indonesia’s chamber of commerce (Kadin) and chief executive of Adaro, the country’s second-biggest producer of coal for power stations.
He was speaking after a meeting in Jakarta on Tuesday between Indonesian officials, the chamber of commerce and representatives from international mining companies including Chalco, Glencore, Norilsk Nickel, Rusal and Vale.
With just over two months to go before the ban comes in, the government and many mining companies are engaged in a game of brinkmanship. Most investors are betting that the government will not risk losing billions of dollars in tax revenues and royalties by halting exports.