Indonesia's 20 percent export duty on almost all unprocessed ore, especially nickel, exported to
Japan and China as well as other countries, is believed to have a negative impact on the Japanese economy, according to media reports.
Among the unprocessed ores, nickel would be the one affecting
Japan most seriously since
Japan relies on imports from
Indonesia for more than 50 percent of its supply for stainless steel production.
Meanwhile,
Indonesia does not impose the tariff on products that are processed at refining plants inside the country and then exported. The country has asked all miners to submit plans to build local smelters or to process ore domestically by 2014.
Additionally, many small mining companies have halted operations due to the export tariffs, causing a monthly loss of $164 million in nickel and bauxite sales.
Earlier this year,
Indonesia also announced that it will impose a total ban on raw material exports in 2014, in an example of resource nationalism, according to which countries that export natural resources try to keep the resources within the country.