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Mining in Indonesia: Regulation Changes Increase Energy and Smelter Deployment Success

The much-debated Indonesian mining regulation (Government Regulation No. 23/2010) was revised for a fourth time in January 2017. The change has left many wondering what the impacts mean to Indonesian miners in the short and long term.

Bans on the export of certain metal mineral concentrates and unprocessed nickel and bauxite ores have been eased. The regulation, prior to January, was designed to encourage miners to build smelters and process locally before exporting.

The industry requirements have been eased for the next five years but have not gone away. The government has instituted annual inspections where mineral operators must continue to demonstrate progress on the deployment of energy and smelting infrastructure to allow for continued permitting during this leeway period.

Benefits

The good news for mining in Indonesia is that revenue streams will resume for some Indonesian operators, as well as enabling more thorough and qualified decision-making around which captive power solutions — from traditional or hybrid deployments to retrofits of existing facilities — derive the best operational outcomes in support of these significant investments.

Risks surrounding the rushed deployment of cookie-cutter solutions can be eased and localized solutions can be more easily tailored to meet the mining and business requirements.

 

Subject Matter Experts
Hartanto: HartantoH@bv.com
Dennis Gibson: GibsonDB@bv.com

@black_veatch