JAKARTA: The government will exempt raw materials for automotive and electronic sectors from the application of anti-dumping duty for cold-rolled coil imports to address concern of Japanese producers against the negative impacts of the plan.

Industry Minister M. S. Hidayat had committed to erase anti-dumping import duty for cold-rolled coils of both sectors because it hasn’t been produced in Indonesia yet.
Indonesian Anti-Dumping Committee (KADI) is investigating manufacturers from Japan, China, South Korea, Taiwan, and Vietnam for alleged dumping practices on cold-rolled coil (CRC) imported from those countries.

A press release from Trade Ministry stated that KADI has received a antidumping proposal from PT Krakatau Steel Tbk as a representative of domestic steel industries.
Japanese automotive and electronic manufacturers in Indonesia, as Industry Minister explained, concerned the implementation of anti-dumping import duty will stimulate production cost and give less benefit to local steel industries.

The concern had been already communicated by Japan’s Minister of Economy, Trade, and Industry Yukio Edano during his official visit to the office of Ministry of Industry yesterday.

"I explained, the application of anti-dumping duty is still on process, but the automotive and electronics will be excluded,” he said.

In addition, the exemption plan had also been discussed between Director General of Manufacture-based Industry Panggah Susanto with Trade Ministry.

Today, KADI is still on investigation stage and hasn’t decided yet whether imported CRCs from the five countries would be charged with anti-dumping import duty or not.
Unfortunately, Co-Chairman of Indonesian Steel and Iron Industries Association (IISIA) Irvan Hakim declined to respond on the Japan’s request.
Mineral investment

Ministry of Industry also revealed Japan’s commitment to enhance investment in the mineral processing industry in Indonesia.

According to Hidayat, Edano has appreciated the government’s plan to boost mining-based downstream industry and to stimulate higher investment from Japan in the mineral-processing sector.

Then, the government has also committed to secure the availability of raw material supply for a company having interest to establish a plant processing minerals such as bauxite, nickel, and iron ore.

He added the investment in the basic metal industry has a potential to pocket incentives in a form of tax holiday or tax allowance, if it fulfills government's requirements.
To bolster the mining-based downstream industry, the government is also formulating a disincentive in a form of export duty for four basic minerals as well as additional tax for certain imported products.

The disincentive policy is necessary to prevent a massive export of raw materials leading to shortage of supplies and stagnation in local downstream industries.
According to Hidayat, export duties for the basic minerals will be applied soon for exports of bauxite, copper, nickel, iron ore, and iron sand.

“We plan to turn on an export verification, to apply export duty, and to ban the mineral exports commencing in 2014,” he said recently.

Indonesia still has 700 million tons of bauxite reserve, 1.7 billion tons of copper, 1.4 billion tons of nickel, 321 million tons of iron ore, and 32 million tons of iron sand.
Meanwhile, the output of bauxite reaches to 15 million tons per year, then nickel 3.27 million tons, iron sand 1.9 million tons, and iron ore 8.6 million tons, all are exported.
In the meantime, the output of concentrate copper is 2.8 million tons per year, of which 1.7 million tons is exported.(T01/NOM)