Minister signs new ruling on export duty of mineral concentrates
Saturday, February 11 2017 - 04:10 AM WIB
Minister of Finance Sri Mulyani Indrawati has signed a new ruling on export duty of mineral concentrates following a new government regulation that allows miners to resume export of the commodities, Kontan reported on Saturday.
The paper quoted Head of Fiscal Policy Agency at the ministry Suahasil Nazara as saying that the export duty will be linked to progress of domestic smelters of the miners which will be assessed by the Ministry of Energy and Mineral Resources.
According to a 2014 government regulation, mineral concentrates export should have been banned starting January 12, 2017 as miners had been required to develop domestic smelters to refine the concentrates prior to export to allow the country enjoy more added value from the commodities. But because many miners have yet to complete the required smelters, the current government last month introduced a new Government Regulation No 1/2017 allowing the miners to continue export of mineral concentrate for another five years on certain conditions including conversion of their mining permit status from mining contract of work (COW) to special mining business license (or IUPK), commitment to develop domestic smelters, and pay export duty.
According to Suahasil, under the new minister of finance regulation, miners whose smelter projects? construction progress ranges from 0-30 percent will be subject to a 7.5 percent export duty. Construction progress of 30-50 percent will be subject to export duty of 5 percent. Progress of 50-75 percent will be subject to export duty of 2.5 percent, and progress of more than 75 percent will not have to pay export duty. The maximum export duty for low grade nickel ore and bauxite is 10 percent. Under the previous ruling, miners whose smelter projects have progress of more than 30 percent were exempted from the export duty.
Suahasil said that the new export duty policy, according to ministry calculation, will potentially provide additional revenue of Rp 5 trillion per year for the government, especially as export of low grade nickel ore and bauxite have been allowed. (*)