JAKARTA (Reuters) -Indonesia is considering raising royalties paid by mining companies from commodities like coal, nickel and copper, among others, its mining ministry said.
The proposal came as Indonesia’s new government is planning major changes in its budget to accommodate President Prabowo Subianto’s big spending plans, including a free school lunch programme.
It aims to improve governance of the sector, ministry official Tri Winarno said, according to a YouTube recording of a public consultation on Saturday about the proposed changes.
Mining is a major source of revenue for resource rich Indonesia. The country is the world’s biggest exporter of thermal coal and nickel products, as well as a major source of tin and copper for the global market.
Officials proposed raising royalty rates paid by miners and producers of metal products based on price levels, including introducing progressive rates for metals like nickel and copper, officials at the public consultation said.
The government proposed levying royalties ranging between 14% and 19% for nickel ore, depending on benchmark price levels, compared with the current 10% flat rate, according to the ministry’s public consultation document.
The document also contained proposals for progressive rates for nickel matte and ferronickel.
For coal, the government would raise royalty rates by one percentage point to up to 13.5%, but only when the benchmark coal price hit at least $90 per metric ton.
The government already charges progressive royalty levies for coal, with the lowest rate at 8% for coal with a calorific value of maximum 4,200 kilocalories per kilogram when prices are at least $90 per ton.
The proposal suggested hiking the royalty rate for copper ore to between 10% and 17%, from a flat 5% now, with increases also considered for copper concentrate and copper cathode.
The proposal also included royalty increases for tin, gold, silver and platinum.
(Reporting by Bernadette Christina Munthe and Gayatri Suroyo; Editing by Jacqueline Wong and Aidan Lewis)
