excerpt… Indonesia Mining Report Q2 2015
The export ban on raw minerals will significantly impact production growth and hamper investment for Indonesia’s mining industry. We do not expect any moderation of the ban in 2015 as thegovernment seeks to attract foreign direct investment and add value to its mining sector. A possible moderation on the ban on bauxite ore is still on the cards for 2016.
With the boom years in commodity prices behind us, we believe more miners in Indonesia will be forced to put the brakes on investment over the coming quarters. The export ban on raw minerals will significantly impact financial growth in Indonesia’s mining sector. In January 2014, the government implemented the ban on unprocessed minerals, in order to stimulate smelter construction and increase mineral export value. Till this date, the government has maintained its strict ban on bauxite and nickel ore. For nickel, it is unlikely that the government will moderate its ban on ore exports given the steady pipeline of nickel smelters coming online which will help soak up mine production capacity. For bauxite, we believe a potential moderation of the ban on bauxite is still on the cards with potential announcements being made in 2016.
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