Indonesia to cut royalty for processed nickel to 2 pct -official (updated)

Valecha Engineering

22/11/2016 11:25

(Adds details, official's quotes) 
    JAKARTA, Nov 22 (Reuters) - 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 
sector. 
    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  INCO.JK , China's Tsingshan, Eramet  ERMT.PA  
and state-owned miner Aneka Tambang (Antam)  ANTM.JK . The 
sector has been rocked by recent uncertainties over the 
country's ban on unprocessed ore exports. urn:newsml:reuters.com:*:nL4N1CI3PZ 
    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. 
 
 (Reporting by Wilda Asmarini; Writing by Fergus Jensen; Editing 
by Christian Schmollinger and Susan Fenton) 
 ((fergus.jensen@thomsonreuters.com; +62 21 2992 7604; Reuters 
Messaging: fergus.jensen.thomsonreuters.com@reuters.net)) 
 
Keywords: INDONESIA NICKEL/