Indonesia's government concedes that it will cause short-term damage; but on January 12th it went ahead and banned exports of mineral ores, at last implementing a law passed in 2009. Officials say that forcing mining firms to export only processed minerals will attract investment in smelters and refineries. After a year or so this will start to add value to the country's exports, they say. But it is quite a gamble. Indonesia has few smelters, and earns $5 billion a year by exporting unprocessed minerals such as copper concentrate, nickel ores and bauxite. The mining ministry had admitted that an outright ban on ore shipments would cut exports by $4 billion this year and $2.5 billion next. With the country's current-account deficit last year hitting 3.5% of gdp, its worst since 1986, and its currency falling steeply, this is a bad time to be forgoing foreign earnings.
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