# Indonesia total ban on ore exports by 2014



## RandR (9 September 2011)

http://www.commodityonline.com/news/Indonesia-may-impose-tax-on-ore-exports-before-total-ban-by-2014-42214-3-1.html

indonesia may impose tax on ore exports before total ban by 2014.

Lolz, sounds like a winner of an idea.


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## Aussiejeff (9 September 2011)

RandR said:


> http://www.commodityonline.com/news/Indonesia-may-impose-tax-on-ore-exports-before-total-ban-by-2014-42214-3-1.html
> 
> indonesia may impose tax on ore exports before total ban by 2014.
> 
> Lolz, sounds like a winner of an idea.




Especially as they are the world's largest steaming coal exporters (29% of world trade in 2010, compared to Australia 26% http://www.worldcoal.org/coal/market-amp-transportation/). 

Interestingly, some of Indonesia's Asian neighbours are the world's biggest importers of steaming coal, with Japan (24%), China (24%), S Korea (17%) and India (11%) making up approx. 76% of total world demand. 

Not sure how well this will go down in the region if they shut up shop!?? Sounds like they know they are running out of the precious black stuff (hmmm, do I smell the passing of "peak steaming coal" in Indonesia?) and are trying to "guarantee" their own supply in the short-medium term.

Can't be good for world coal price from 2014 - and ultimately much higher consumer prices, though? Unless some other countries can pick up the slack and suddenly find an extra 29% of world steaming coal to sell? 

Of course, the likes of BHP would obviously disagree - with soaring prices as manna from heaven.LOL

Interesting...

aj


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## Mr Z (9 September 2011)

I don't like this nationalization trend one little bit. I am starting to weight Sovereign risk more highly in my decision making process. Unfortunately I think we will see more of it in the future, whatever comes of this.


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## Smurf1976 (9 September 2011)

I'd be surprised if we don't see more of this type of thing as resources become scarcer.

From an Australian perspective, we would seem to have a huge opportunity to value add to resource exports here in this country. Impose a tax on exports comparable to that of others, but impose no tax if the minerals are processed locally. Instant re-industrialisation and economic problems fixed.


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## RandR (10 September 2011)

Smurf1976 said:


> I'd be surprised if we don't see more of this type of thing as resources become scarcer.
> 
> From an Australian perspective, we would seem to have a huge opportunity to value add to resource exports here in this country. Impose a tax on exports comparable to that of others, but impose no tax if the minerals are processed locally. Instant re-industrialisation and economic problems fixed.




Which is exactly what this indonesian proposal seems to be about, there only taxing and banning the 'raw' ore exports. There idea is to encourage the processing/refining/use of these in manufacturing onshore in Indonesia.

With there significant and relatively (on a global perspective) cheap labour force it will probably be a winner. Aside from the amount of cigars they smoke I dont think there'd be too much difference between using indonesian labour and chinese labour.

Indonesia is going to become a vitally important economy and trading partner to Australia in the future.


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