Indonesia – Ban on Exports of Unrefined Mineral Ores

As Members may already be aware from various press reports, the Indonesian government has passed a law that bans the export of unrefined mineral ores, to take effect from 12 January 2014. Members may recall that Indonesia has previously tried to ban exports of unrefined ores, as reported in the Club's News Alert of 3 May 2012 (click here).

As before, it is understood that the purpose of theban is to encourage industrial development by forcing mining companies to build smelters; requiring raw materials to be processed before being shipped overseas “adds value” for the benefit of the local economy.

Indonesia is reported to be the world’s leading exporter of nickel ore and Members involved in the trade will already be aware of the considerable care required in carriage of nickel ore cargoes and the risks of liquefaction as highlighted in the Club’s Circular of 31 May 2012 (click here).

Whilst a ban on unrefined mineral ores may help to reduce incidents due to the volatile nature of the cargo, strict enforcement of the ban is likely to be problematic given that there are still insufficient numbers of smelters and other facilities to process the quantities of ores that are usually exported.  

The Correspondent in Jakarta, Spica International, is seeking clarification from the relevant Authorities in Indonesia as to the likelihood of the forthcoming ban on mineral exports being enforced. For the time being, the situation remains unclear.

In the meantime, Members whose vessels are due to load ore cargoes from Indonesian ports should be aware of the ban that is due to have effect from 12 January 2014, and take steps to satisfy themselves that the shippers are in possession of a valid permit to export the cargo in accordance with anynew regulations.

For further assistance and/or clarification in relation to the above, Members should approach their usual Club contact.