In one of his most far-reaching economic policy decisions since taking office nearly 10 years ago, President Susilo Bambang Yudhoyono approved the mineral ore export ban.
But in last minute changes at the weekend, he diluted it to allow exports of copper, iron ore, lead and zinc concentrates to continue, giving a reprieve to U.S. mining giants Freeport McMoRan Copper & Gold and Newmont Mining Corp, which together produce 97 percent of Indonesia's copper.
No such relief was offered to the nickel and bauxite industries, clouding the future for state-owned nickel miner PT Perusahaan Perseroan Aneka Tambang (Antam) and hundreds of other smaller miners.
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"Minerals that have to be refined before export are bauxite, nickel, tin, chromium, gold and silver because they don't have intermediate products," Sukhyar, director general of coal and minerals at the ministry, told Reuters.
The long-planned ban hopes to eventually boost Indonesia's profits from its mineral wealth by forcing miners to process their ores before export. But officials fear a short-term cut in foreign revenue could widen the current account deficit, which has undermined investor confidence and battered the currency.
Indonesia is also the world's biggest exporter of refined tin and thermal coal and home to the fifth largest copper mine and top gold mine. Mineral shipments totaled $10.4 billion in 2012, around 5 percent of total exports, according to the World Bank.
Yudhoyono's last-minute regulation significantly lowers the minimum processing requirements for copper, manganese, lead, zinc and iron ore to be defined as concentrates. However, officials have said that such exports would only be allowed until 2017.
Under the proposed changes government officials said 66 companies, which include Freeport and Newmont, would be allowed to continue to export "processed mineral" as they have provided assurances to the government that they would soon build the necessary smelters.
"As long as they can fulfill the requirements, Freeport and tens of national miners are still allowed to export," Industry Minister M.S. Hidayat told Reuters.
More details are expected to be announced this week.
The companies likely to feel the most impact from the ban are miners of nickel and bauxite, numbering in the hundreds.