Following the enactment of a law in 2009,
Indonesia has passed a regulation that places a ban on all mineral ore exports
as of Sunday, Jan. 12, 2014. Since taking office nearly 10 years ago,
Indonesia's president, Mr. Susilo Bambang Yudhoyono, has made one of his
biggest economic policy decisions of his career. President Yudhoyono
“approved a last-minute regulation that would most likely ease the ban’s impact
for major mining companies” within the U.S. The mineral ban will have an
enormous impact on the country’s economy as Indonesia is the world’s biggest exporter
of nickel ore and is home to the top gold mine. For instance, the
country’s mineral shipments in 2012 totaled $10.4 billion (around 5 percent of
their exports). Exports of raw ore are not permitted, but companies that
can process the ore are allowed to export such minerals. The ban was
placed as an attempt to encourage miners to process their ores domestically,
but others fear that this “cut in foreign revenue could widen the current
account deficit” and batter the country’s currency. In addition to the
local economy, small domestic companies will suffer as well since they cannot
afford to build smelters, which cost millions of dollars. Because of the
uncertainty with regard to the mineral export ban, more than 100 mining
companies have reduced or shut down their operations. Unfortunately,
thousands of mine workers have also been laid off, which has set off protests
in the city of Jakarta.
Amanda Ngo
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