Indonesia: Nickel Processing Products Below 70% Should Be Subject To Export Tax

The Ministry of Investment /BKPM plans to levy export taxes on processed goods with less than 70% raw material content. The move is aimed at protecting investment in the country's electric vehicle ecosystem.

Investment Minister/HEAD of BKPM Bahlil Lahadalia says one of the regulations threatening investment in the national ev ecosystem comes from continental Europe. The European Union has demanded that battery factories be built near electric car factories. Meanwhile, in Indonesia, we are developing downstream to create added value from mining to batteries. If electric car manufacturers in other countries only take raw materials, Then Indonesia will lose.

Therefore, Bahlil plans to impose an export tax on goods processed to a level below 70%. Bahlil said he would further discuss the details of the regulation with the Finance ministry.

"The export of these raw materials will be taxed quite high. Therefore, the country will at least be compensated when it allows the export of nickel ore raw material, "Balil said at a virtual press conference held on Tuesday (May 24).

According to him, if Indonesia does not carry out downstream processing of raw materials that other countries usually do, our country will continue to be cheated.

Meanwhile, according to the Indonesian Nickel Miners' Association (APNI), there are currently 37 entities in the downstream nickel sector in Indonesia, namely pyrometallurgy and hydrometallurgy. The pyrometallurgy output is nickel pig iron (NPI) or nickel iron. At the same time, hydrometallurgy produces nickel sulfate as a cathode material for batteries.

For the ELECTRIC vehicle industry, there are currently five foreign industries investing in the ev battery ecosystem. The five investors are LG Chem, Ningde Times New Energy Technology Co LTD (CATL), Zhejiang Huayou Cobalt, BASF and Foxconn