Indonesia to tax exports of raw minerals

A truck unloads freshly excavated rock into a crusher at a copper mine in Indonesia The success of its mining sector has been a key driver of Indonesia's growth in recent years

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Indonesia has said it will impose an average tax of 20% on exports of 14 raw minerals, including copper and gold, in a bid to encourage local processing.

It said it would also prohibit miners from exporting these raw minerals until they submit plans to build local processing facilities.

Indonesia has been keen to increase revenues from its mining sector, a key contributor to its economy.

However, some miners criticised the move saying it would hit growth.

"The government wants to kill a mouse in a rice field, but they're burning the whole field," said Tjahyono Imawan, president of the Indonesian Mining Services Association.

More benefits?

Indonesia is resource rich country and the success of its mining sector has played a big role in its economic growth in recent years.

Policymakers have been keen to tap into the sector for further growth and ensure that its success is distributed among other sections of the economy.

As part of those efforts, the government has been pushing for miners to process the minerals locally.

The hope is that the setting up of local processing units will not only see increased investment in the sector, but also generate additional employment.

The government had previously said that it planned to ban exports of some raw minerals by 2014.

Earlier this year, it said it would limit foreign ownership of Indonesian mines to 49% in an attempt to increase domestic investment in the sector.

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