(Adds context on non-tax revenues)
By Wilda Asmarini
JAKARTA Nov 22 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
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.
"This is for miners like Vale," he said, referring to the
Brazilian miner which is the top nickel producer in Indonesia.
A royalty of 4 percent would still be charged against sales
of nickel ore, Gatot said.
Indonesia, where thousands of coal mines went out of
business as commodity prices cratered, is confident of achieving
its target of 30.11 trillion rupiah ($2.24 billion) non-tax
revenue from mining this year, Gatot said last month.
The world's top thermal coal exporter missed its 2015
non-tax revenue target by 43 percent.
($1 = 13,440 rupiah)
(Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing
by Susan Fenton and David Evans)