Dodwell in SOM3 Medan - Post 6

June 29, 2013

For the first time ever, ABAC presented at the Mining Task Force this week.

I don’t know why we have never passed through their door, but for 17 years we appear to have ignored this important sector.

Above all else, they wanted to know about ABAC, and so the priority was to provide an ABAC 101 introduction to what we are trying to achieve. Tougher was to identify issues of priority to ABAC that would concern the Mining Task Force – though several emerged after a little digging: first was the recognition that mining companies are less miners than they are managers of extremely long and complex supply chains: they are profitable depending less on the price of the mineral coming out of the ground than they are on the efficiency with which they can transport the mineral to destination consumers around the world. So discovery number one, they have keen interest in eliminating chokepoints in the supply chain.

Second, they are massive consumers of industrial chemicals – and have constant headaches with the reality that formulations of these chemicals can vary country to country. Consistent and reliable descriptions of chemicals and their formulations is essential. This suggests a close interest in APEC’s Chemicals Dialogue (which was also meeting this week in Medan, though I have never passed through their door either). But it also suggests a keen interest in regulatory convergence, and on rigorously applied global data standards. Again ABAC becomes interested.

Of course miners get a very bad environmental rap, and so we ought to have a keen interest in tightening oversight of their environmental performance.

As visitors to their house, it was of course polite to take an interest in the issues occupying their agenda. And we were lucky to have ABAC Staffer Akihiko Tamura from Komatsu in attendance for ABAC throughout. On balance I think he was underwhelmed. He reported that the biggest issue was Indonesia’s new mining law, introduced back in 2009, intended to restrict export for ore/ raw material of metal mining from the beginning of 2015. The aim is to establish more value added activity within Indonesia. Apart from the fact that this probably does not comply with WTO rules, you can imagine the international mining companies are very uncomfortable. In practical terms, the result of the law is that Indonesian refinery capacity, even including the plans in pipeline, is today much lower than their raw material production in 2010. If the law is strictly applied, we may see short supply of material pretty soon...

Akihiko and Komatsu may continue to participate in Mining Task Force meetings, but I suspect it may be some time before the rest of us return…

A robust official welcome to APEC from the North Sumatra government

⇒  More blog posts from the SOM3 Medan meetings series.

⇒  Dodwell's other meetings blogs.


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