UPDATE 2-Indonesia to cut royalty for processed nickel to 2 pct -official – by Wilda Asmarini (Reuters U.S. – November 22, 2016)


Nov 22, 2016 – Indonesia will cut the royalty charged on sales of processed and refined nickel to 2 percent, a mining ministry official said on Tuesday, part of a revision of government rules on non-tax revenue from the coal and minerals sector.

The revision is needed to encourage more miners to develop smelters, said Coal and Minerals Director General Bambang Gatot, referring to a government drive to develop downstream industries and increase returns from Indonesia’s mineral resources.

The royalty, paid by miners to the government, is currently 4 percent of each sale. “If it’s 4 percent it’s as if it gives no incentive for processing and refining. It gives no stimulus to companies to (build smelters),” Gatot told parliament.

The reduction in royalties may come as welcome news to investors in Indonesia’s budding smelter industry, which include Vale Indonesia, China’s Tsingshan, Eramet and state-owned miner Aneka Tambang (Antam). The sector has been rocked by recent uncertainties over the country’s ban on unprocessed ore exports.

The revised regulation is currently being checked by the law and human rights ministry, Gatot said, adding that royalties for other metals would also change under the new rules, but stopped short of saying when the new regulation would be released.

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