Indonesia Has Proposed An Export Tax On Nickel Matte

The Indonesian government will impose a progressive tax on nickel exports. The policy will impose a 2 percent tax on two nickel products, nickel pig iron (NPI) and nickel iron from 2022.

SeptianHario Seto, Deputy Minister of Investment and Mining at the Ministry of Maritime Affairs and Investment Coordination (Kemko Marves), explained on 23 January 2022 that the Indonesian government imposed export taxes on nickel pig iron and nickel iron for the following two reasons.

First, the Indonesian government wants to push nickel further downstream. Encourage investment in higher value-added nickel products, not just ferronickel. As nickel is a non-renewable natural resource, when it is smelted and exported, the Indonesian government naturally stimulates the industry to produce nickel with higher added value.

The second goal is to keep nickel reserves resilient. As we all know, the number of nickel processing plants producing pig iron and nickel iron with sapropelic nickel ore as raw material is increasing, but the reserve of saproic nickel ore has not increased significantly. At present, the capacity of NPI and ferronickel smelters is very large. If all companies build smelters (nickel pig iron and nickel iron), processing plants and refineries will have more capacity, and of course more nickel ore will be needed. As a result, nickel ore reserves will soon be exhausted. If this trend continues, nickel reserves are expected to be exhausted by 2040.

At present, the Indonesian government is experimenting with a price of $15,000-16,000 per tonne and a 2% tax, which will then go up as nickel prices soar.

So far, Septian said, the export tax has only been levied on nickel pig iron and nickel iron. The Indonesian government has not ruled out an export tax on high nickel matte, which is still under evaluation.

Septian confirmed that the export tax will be implemented in 2022. However, he did not specify when the policy would be implemented. Rizal Kasli, chairman of the Indonesian Association of Mining Experts, suggested that the export tax should not be based on the type of product produced.