Freeport is liable to pay almost US$1 billion this year and the amount could rise to just below US$5 billion in 2016 due to the new taxes, an industry source who declined to be identified said.
The bans impact could also be devastating for nickel and bauxite miners.
Siswo Awaliyanto, from bauxite producer Harita Prima Abadi Mineral, told reporters that the firm would cut production by up to half this year, had closed one its three sites and was mulling laying off at least 25 percent of its 1,600 workers.
Despite the industry’s concerns, the Indonesian government sees the ore export ban as a sensible policy to keep more profits from the mining industry at home.
“I went to China recently and there I witnessed very high piles of bauxite — 3 million tonnes — piled up on the coast, all raw exports from Indonesia,” Indonesian Minister of Industry MS Hidayat said. “This is what we want to stop.”
However, for many miners, the Indonesian government’s approach remains misguided.
Mansur Geiger, from a copper and gold exploration firm on the Indonesian part of Borneo, said at a recent protest in Jakarta against the ban that “everyone supports the grand mission of adding value to natural resources.”
However, he added that: “We’ve seen no blueprint” for the government’s long-term plans.