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Indonesia to double nickel ore royalties, adjust rates for other minerals

Indonesia is set to double royalties on nickel ore sales to 10%, while also adjusting the rates for other minerals such as copper, bauxite and aluminum, Reuters reported Dec. 10.

A major exporter of nickel ore, the country is targeting to curtail its reliance on natural resources exports through the establishment of smelting industries for minerals such as nickel, bauxite and copper. A previously announced restriction on nickel exports was expedited from January 2022 to the end of 2019.

"The [royalty] tariffs on nickel needed readjustment to give more balanced rates between ore miners and those who produce refined products," Indonesia's director of minerals at the mining ministry, Yunus Saefulhak, was quoted as saying in the newswire's report.

Saefulhak added that the adjustment is targeted to encourage miners to add value to the ores through lower royalties on processed products. Other adjustments to be enacted included the reduction of ferronickel and nickel matte sales royalty from 4% to 2%, with a 2% royalty levied on other nickel products, including mixed hydroxide precipitate and nickel sulfide.

Meanwhile, copper ore royalty was increased to 5%, while copper concentrate royalty was set at 4%. Bauxite royalty was doubled to 7%, while aluminum royalty was cut to 2%. The regulations also include a 5% royalty on nickel pig iron sales.

The new regulations, a copy of which was seen by Reuters, which will take effect Dec. 25.