Indonesia Finalizes Mining Export Tax Regulations

By Admin
Indonesia has drafted and approved a new mining export tax that will cut the base rate tax for copper concentrates in half.Since January, Freeport-McMoR...

Indonesia has drafted and approved a new mining export tax that will cut the base rate tax for copper concentrates in half.

Since January, Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. have disputed the new mining rules, which include an escalating export tax, resulting in a five-month stoppage of copper exports. The two U.S. companies have previously insisted they should not have to pay any additional taxes because it violates their current mining contracts.

According to Coal and Minerals Director General Sukhyar, the new regulation would start below 10 percent and be linked to a company’s progress in building a smelter.

"Yesterday I had discussions with the finance ministry and they said the draft is already finalized," Sukhyar told reporters, adding that it been agreed by the mining, industry and finance ministries.

However, neither mining company would confirm whether a reduced rate would be acceptable.

"We have not received it yet," Newmont spokesman Rubi Purnomo said about the new draft export regulation and rate. "We are very hopeful that the government will give us certainty very soon and a resolution that will allow PTNNT (Newmont) to resume operations in economically sustainable manner."

Freeport said it would need the certainty of a contract extension before investing into a copper smelter and turning its Grasberg complex into an underground mine after 2016.

Indonesia’s current copper export tax begins at 25 percent and rises to 60 percent in the second half of 2016, before a total concentrate export ban in 2017.

Even if the mining companies accept the newly finalized mining export regulations, large hurdles remain before exports can resume.


Featured Articles

China increases copper import pace, following price plummet

In August, China reached a 26% rise - representing a 100,000+ tonne increase - in copper imports year-on-year, largely driven by product price drops

Ford criticises “inefficient” government mining permissions

In a letter to the US Department of the Interior, the car giant Ford has asked the American government to speed up its current mining permission process

Aggreko and Labyrinth Resources’ sustainable power project

Labyrinth Resources has been working with Aggreko to complete a virtual pipeline power project, which is designed to aid the sustainable energy transition

Despite regional ban, crypto miner Canaan doubles profits

Digital Mining

The future of all-electric sustainable mining technologies


Anglo American first half earnings decline 28 percent

Supply Chain & Operations