The Ministry of Finance (Kemenkeu) has officially released new regulations regarding export duties for mining exporters. This is stipulated in the Minister of Finance Regulation (PMK) No. 71 of 2023.
Based on the document PMK 71/2023 received by CNBC Indonesia on Tuesday, July 18, 2023, the government has now set the tariff or export duties for processed metal mineral products based on the smelter development progress, requiring a minimum of 50% completion.
“The determination of export duty tariffs on the export of processed metal mineral products, as referred to in paragraph (2), is based on the physical progress of refining facilities that have reached at least 50%,” stated Article 11, paragraph (4) of PMK 71/2023, quoted on Tuesday, July 18, 2023.
Phase of smelter development
The phases of smelter development progress mentioned consist of three stages:
- Stage I: When the physical progress of development is less than 50% but below 70% of the total development.
- Stage II: When the physical progress of development is less than 70% but below 90% of the total development.
- Stage III: When the physical progress of development is above 90% and up to 100% of the total development.
The stages of smelter development progress are indicated in the export recommendations issued by the minister in charge of energy and mineral resources.
Concentrate-based export duty
The new regulation differs from the previous one, where the export duties were waived if the smelter development was over 50%. The new tariff rates, as determined by the government through PMK 71/2023, are calculated based on the concentrate from mining products and will gradually increase.
Here are the detailed provisions for the export duty tariff for smelter development until December 31, 2023:
- Copper concentrate with a copper content of less than 15% (Cu) has a tariff of 10% at Stage I, 7.5% at Stage II, and 5% at Stage III.
- Laterite iron concentrate (gutite, hematite, magnetite) with an iron content of less than 50% (Fe) and (Al2O3+SiO2) content of more than 10% has a tariff of 7.5% at Stage I, 5% at Stage II, and 2.25% at Stage III.
- Lead concentrate with a lead content of more than 56% (Pb) has a tariff of 7.5% at Stage I, 5% at Stage II, and 2.5% at Stage III.
- Zinc concentrate with a zinc content of more than 51% (Zn) has a tariff of 7.5% at Stage I, 5% at Stage II, and 2.5% at Stage III.
Starting from January 1, 2024, until May 31, 2024, the export duty rates for mining products will increase according to the following provisions:
- Copper concentrate with a copper content of less than 15% (Cu) has a tariff of 15% at Stage I, 10% at Stage II, and 7.5% at Stage III.
- Laterite iron concentrate (gutite, hematite, magnetite) with an iron content of less than 50% (Fe) and (Al2O3+SiO2) content of more than 10% has a tariff of 10% at Stage I, 7.5% at Stage II, and 5% at Stage III.
- Lead concentrate with a lead content of more than 56% (Pb) has a tariff of 10% at Stage I, 7.5% at Stage II, and 5% at Stage III.
- Zinc concentrate with a zinc content of more than 51% (Zn) has a tariff of 10% at Stage I, 7.5% at Stage II, and 5% at Stage III.
