The Ministry of Energy and Mineral Resources (ESDM) will meet nickel industry representatives this week to discuss a planned increase in mineral royalty rates, following opposition from miners concerned about market conditions and rising costs.
The meeting, scheduled for Thursday (April 17), comes ahead of the implementation of revised royalty rates expected to take effect in the second week of April.
“We’re having a discussion on Thursday, that’s the plan,” Tri Winarno, Director General of Minerals and Coal at the ministry, told reporters late on Monday. He said the government aims to find a compromise that maintains industry profit margins while increasing state revenue.
The proposed hike will apply to several mining commodities, including coal, nickel, copper, gold, silver, and tin. Royalties are expected to rise between 1% and 3%, adjusted according to global commodity prices. The policy is part of broader efforts to boost non-tax state revenue (PNBP).
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Energy Minister Bahlil Lahadalia said on April 9 that the revisions had been finalized through updates to two government regulations: PP No. 26/2022 on non-tax revenue tariffs and PP No. 15/2022 concerning fiscal treatment in the coal mining sector.
“This will be effective this month, likely in the second week,” Bahlil said, adding that the policy had already been socialized.
However, the Indonesian Mining Association (IMA) and other industry groups have urged the government to postpone the move. They warn that introducing higher royalties amid escalating U.S.-China trade tensions and weakening global demand could weigh heavily on the sector.
Alexander Barus, chairman of the Indonesian Nickel Industry Forum (FINI), said nickel prices have fallen 16% over the past month and 23% over the past six months, reaching $13,800 per tonne—the lowest since 2020.
“The fiscal adjustment must consider the current market downturn so it does not burden the industry while we are trying to sustain the national downstream program,” Alexander said in a statement.
He also cited rising domestic costs, including minimum wage increases, export earnings repatriation rules, and a planned global minimum tax starting in 2025, as added pressure on the sector.
Indonesia is the world’s largest producer of nickel, a key material in batteries for electric vehicles.
Editing by Reiner Simanjuntak
