Indonesia' government has lowered the benchmark price of mining products exports duty for September - Photo: Special

JAKARTA (TheInsiderStories) – Indonesia’ government has lowered the benchmark price of mining products exports duty for September, the trade ministry has announced on Thursday (08/29). It said, the global fluctuations prices affected the next month’ decline.

Compared to the previous month, most mining products experienced a decline. Iron concentrates (hematite, magnetite, Fe ≥ 62 percent, and ≤ 1 percent TiO2) with an average price of US$ 92.61/WE or decrease 10.05 percent. Laterite iron concentrates (gutite, hematite, magnetite) with levels (Fe ≥ 50 percent and (Al2O3 + SiO2) ≥ 10 percent) with an average price of $47.32/WE or a decrease of 10.05 percent.

Furthermore, iron sand concentrate (Lamela magnetite-ilmenite, Fe ≥ 56 percent) with an average price of $55.30/WE or decreased by 10.05 percent, zinc concentrate (Zn ≥ 51 percent) with an average price of $584.58/WE, down 9.85 percent.

Then ilmenite concentrate (TiO2 ≥ 45 percent) with an average price of $215.30/WE or down by 0.67 percent and washed bauxite (Al2O3 ≥ 42 percent) with an average price of $23.77/WE, down 1.56 percent.

Meanwhile, manganese concentrate (Mn ≥ 49 percent) with an average price of $ 275.35 / WE and pellet of iron sand concentrate (lamella magnetite-ilmenite, Fe ≥ 54) with an average price of $117.98/WE, no change.

“The prices of most products have decreased and the rest are still rising due to international price fluctuations. The products that go up are only copper concentrates, lead concentrates, rutile concentrates, and nickel which has increased,” said Director General of Foreign Trade Indrasari Wisnu Wardhana in an official statement.

Copper concentrate (Cu ≥ 15 percent) with an average price of $2,355.57/WE or an increase of 1.81 percent, lead concentrate (Pb ≥ 56 percent) with an average price of $835.67/WE or an increase of 5.29 percent.

Then rutile concentrate (TiO2 ≥ 90 percent) with an average price of $942.56/WE or an increase of 2.02 percent, and nickel (Ni <1.7 percent) with an average price of $21.62/WE or an increase of 16.42 percent.

The provision was stipulated in Regulation of the Minister of Trade No. 68 of 2019, dated August 26, 2019, Wardhana said. Basic price calculation for commodity iron concentrate, laterite iron concentrate, iron sand concentrate, manganese concentrate, ilmenite concentrate, and rutile concentrate sourced from Asian Metal and Iron Ore Fine Australian.

While copper concentrate, iron sand concentrate pellet, lead concentrate, zinc, nickel and bauxite concentrate are sourced from the London Metal Exchange (LME), Wardhana said.

“The determination of the export benchmark price for September is determined after taking into account various written inputs and coordination from various related agencies,” he adds.

Then, a group of top executives of foreign and local mining firms gathered at a forum held in a five-star hotel at the heart of Jakarta recently, expressing their wishes that the government should do more to help their industry as several problems were left unsolved.

They mentioned three main hurdles in the mining industry right now a lack of government attention to mining exploration, regulatory uncertainty and unfair fiscal treatment in terms of royalties for their commodities.

Each year, the government earmarks state funding for mining exploration in the budget of the Energy and Mineral Resources Ministry’s Geology Agency.

However, data from the Indonesian Geologists Association show that the country saw a drop in the amount of overall expenditure for exploration of mineral commodities, such as gold and copper. The number was recorded at $113 million in 2015, far lower than $497 million in 2012.

“We don’t have a big budget for exploration from the government. We have to start discussing with the government to ask for an increase, not only rely on the company budget,” said Frans Kesuma, president director of local mining contractor firm PT Pama Persada.

Kesuma suggested that mining companies immediately discuss the issue with the government as relying mainly on the private sector for exploration was not sustainable, especially when a downturn hit the industry.

Boosting exploration in the mining sector is important to ensure adequate reserves in the future. Government data show that Indonesia’s coal reserves, which stood at 26.2 billion tons as of March 2018, will deplete in about 50 years from now, assuming there is no new discovery of a reservoir.

Coal is expected to be the main energy source for Indonesia for over 30 years from now as the commodity will still be contributing more than 20 percent to the national energy mix.

Beyond coal, Indonesia still has big untapped resources of other minerals, such as nickel ore laterite, which will be an integral part of batteries for electric vehicles. The country had around 6.5 billion tons of reserves of the commodity in 2017.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com