indonesia plans 50% mining export tax by 2013

JAKARTA, April 3 (Reuters) - Indonesia, a major global producer of raw materials, is planning to impose a 25 percent export tax on coal and base metals this year, an industry ministry official said on Tuesday, with the charge rising to 50 percent in 2013.

Late last year, Southeast Asia's largest economy outlined plans to introduce export taxes on metals and minerals, aiming to encourage downstream investment in the mining sector.

Talks on the export tax were put on hold last week however, with both the industry minister and energy and mineral resources minister due to discuss the plans.

Although these plans remain on hold, details are emerging from government departments.

It is hoped that introducing an export tax will prevent a deluge of mineral and metal ore shipments, as producers ramp up ahead of a planned 2014 ban, Industry Ministry Secretary General Anshari Bukhari told Reuters.

"We should actually impose the export tax earlier this year, so that the current export rush can be avoided," he added. "In 2013 we plan to increase the export tax to 50 percent."

Indonesia, the world's top thermal coal and refined tin exporter, has announced a series of new mining regulations this year, including a ban on exports of some unprocessed metals from 2014 and changes to rules on foreign ownership.

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On top of that the Indonesian government also plans to implement a ban of foreign ownership in Indonesian mines exceeding a 49%-stake.

Despite I doubt that the tax will eventually be that high it's about time to retreat from Indonesia for WEC. The risks of regulatory arbitrariness have been enormous and apparently are growing. The company can't afford losing another asset in this corrupt communist country.