Wants To Improve Mining Governance, MIND ID Asks DPR For Support

Photo: Doc. Antara

JAKARTA - President Director (Managing Director) Mining Industry Indonesia (MIND ID) Hendi Prio Santoso asked for support from Commission XII of the DPR RI to improve the governance and trade system of the Indonesian mining industry.

"We ask for support from Commission XII because Commission XII has the power to influence commerce, governance. Because of the regulatory aspect, of course Commission XII is the supervisor and supervisor of the sector, so we hope that there will be support on the side of governance, commerce, "he said in a Hearing Meeting (RDP) with Commission XII of the DPR RI in Jakarta, quoted from Antara, Wednesday, December 4.

In terms of governance, Hendi hopes that there will be restrictions on the number of smelters through the licensing moratorium. If the number of smelters increases, he continued, it will make oversupply (conditions when supply exceeds demand) from the world market side.

As has happened to ferronickel, oversupply caused the commodity price to fall, even though it was done indirectly and unintentionally. Now, the price of ferronickel is said to be unable to cover the cost of production.

Then, MIND ID has a plan to develop its own Steam Power Plant (PLTU) with a energy requirement of 5 gigawatts (GW).

"These 5 gigawatts are not in the RUPTL (Electricity Supply Business Plan), so we ask for permission to be given support so that they can more freely provide electricity for their own needs, because we will build smelters," he said.

Two other requests from the governance side related to downstream demand are carried out by competent parties, and understanding the business judgment rule in the Law Enforcement Officials (APH) so that the risk of abuse of authority can be minimized, such as in the private sector.

On the trading side, his party asked that import incentives not be given to products that have been produced domestically.

For example, PT Timah Tbk has a subsidiary named PT Timah Industri Mineral (TIM) to make a chemical tin (downstream metal tin product) or a tin powder.

When PT Timah sells commodities to TIM, it is subject to a 10 percent Value Added Tax (VAT). However, when the TIM trades in imports, it is subject to 0 percent VAT.

Therefore, MIND ID hopes that there will be a policy calibration from the Ministry of Trade or the Ministry of Industry so that domestic products can be more competitive than imported products.

Furthermore, the determination of the quota for production of critical minerals and strategic minerals by the Minister of Energy for Resources and Minerals (HR) was requested based on recommendations from State-Owned Enterprises (BUMN) and mining associations.

"For example, in the past, we have no boundaries or understanding of the context of world supply demand. Finally, in the past, our lead production flooded the world market, (then) the price fell significantly. The loss was also our country because we could not accept the optimal foreign exchange results. So I hope that the regulator in providing the production quota also pays attention (the critical and strategic mineral production quota) so that the RKAB (Work Plan and Cost Budget) given did not exceed the world demand supply because it was proven in the past, the tin price was destroyed due to the oversupply carried out by Indonesia," said Hendi.

Another form of support on the trading side is that SOEs must get a dominant quota to ensure price stabilization.

Regarding the downstream side, his party requested that SOEs be granted a privilege to obtain a Special Mining Business Permit Area (WIUPK) on a priority basis, People's Mining Permits (IPR) are not granted to critical and strategic minerals, compact persons are required to carry out field verification, WIUPK critical and strategic minerals that are vital national objects must be maintained by APH, the government sets a national production quota to maintain a critical and strategic mineral balance, as well as relaxation of copper export permits as a result of the force majeur incident of gas clearing fires.

Regarding industrialization, MIND ID asks for certainty in terms of energy availability to support downstreaming, support for the realization of coal Management Agency Partners (MIP) as compensation for the fulfillment of coal domestic Market Obligations (DMO), as well as support for domestic financing for downstream projects.

Especially for PT Bukit Asam Tbk, Hendi stated that there was injustice because the obligation to supply it to PT Perusahaan Listrik Negara (PLN) reached 90 percent. For him, no more coal companies in Indonesia have obligations as adopted by Bukit Asam.

"So, we hope that there will be a new policy. The MIP can carry out theualization of this inequality condition," he said.