Amelia Rahima Sari, Antara, Jakarta – Fahmy Radhi, an energy economy expert from Gadjah Mada University (UGM) criticized the government's relaxed export ban on the raw material of tin, silver, and gold specifically for Freeport Indonesia (PTFI). He considered it to be discriminative.
The export concentrate permit would only end as of June 2023 but be extended to last until May 2024. Fahmy criticized the Energy and Mineral Resources Ministry for giving leeway for Freeport before the ban's expiration date actually arrives.
"The relaxation of export concentrate is discriminative against nickel and bauxite businesses that were subjected to domestic smelter industrial downstream. This will only cause them to also demand relaxations for exports on similar commodities," Fahmy wrote in a statement on Monday, June 26, 2023.
Indonesia's industrial downstreaming policy has been met with multiple challenges that could potentially ruin the program, especially, Fahmy asserted, following the finding of illegal nickel ore exports to China that happened since 2020 that amounted to a fantastic 5.3 million tons.
"The relaxation of concentrate exports and the illegal export of nickel ore will trigger uncertainty which will cause smelter investors to leave the country," he elaborated.
He finds it unfortunate if the industrial downstream eventually fails as the program has proven to greatly increase added value after Indonesia managed to increase the export value of nickel derivative products up to 19-fold.
"What was originally Rp 17 trillion or US$1.1 billion in 2017, grew to Rp 326 trillion or US$20.9 billion in 2022," said Fahmy.
A similar situation happened with Bauxite derivative products, he said, which had increased state revenue, namely from Rp 21 trillion in 2017 to around Rp 62 trillion by the end of 2022.
As previously reported, the Energy and Mineral Resources Minister (ESDM), Arifin Tasrif, confirmed on April 28 that the government would allow Freeport Indonesia to export copper concentrate after June 2023.
The government, he said, has a number of considerations to extend the permit, with one of them related to the constraints on smelter construction due to the Covid-19 pandemic.