INDONESIAN GOVERNMENT TO ‘UNDER MINE’ OWN INDUSTRY WITH EXPORT TAX
NEW LEGISLATION FOR MINING SECTOR LIKELY TO HAVE REPERCUSSIONS TO OPERATORS IN INDONESIA
In a move which will likely have a huge impact on the mining sector in Indonesia, on 27 April 2012, Jakarta announced that from June 2012, coal exports would be subjected to a 25% export tax, which will be further increased to 50% from 2013. On 01 May 2012, Indonesian Energy and Mineral Resources Minister Jero Wacik announced that this export tax would not only be applied to coal exports, but would be widened to now include up to fourteen mineral commodities if sold in the form of ore, including copper, gold, silver, tin, lead, chromium, molybdenum, platinum, bauxite, iron ore, iron sand, nickel, manganese and antimony. The export tax is arguably aimed at preventing mining companies maximising their mineral recourse production, ahead of a ban on unprocessed exports in 2014, and is likely part of an effort to preserve domestic coal supplies at a time when the subject of fuel subsidies is weighing heavily on the ability for the government to manage the coffers, something which is also poised to become a potential deal breaker for voters ahead of 2013 presidential elections.
read more
