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Mining firms urge govt to delay royalty hike amid US tariff pressure
Industry groups are pressing the government to delay increasing mining royalties this month as planned, regardless of the pause in US tariffs, underlining the persistent global uncertainty and already burdensome domestic rules for miners.
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Two barges transport coal on Aug. 16, 2022, in the waters off Samarinda, East Kalimantan. (AFP/Adek Berry)
T
he Indonesian Mining Association (IMA) has demanded a postponement of the government’s plan to increase coal and mineral royalties this month, arguing that the United States’ trade policy was already putting too much pressure on mining operations.
Since he was sworn in to his second term in January, US President Donald Trump has announced a series of steep tariffs for imports from many countries in what Washington has called a “reciprocal” measure to protect US industries. In a sudden turnabout late on Wednesday, Trump announced a 90-day pause in tariffs, including 32 percent on Indonesian products.
The move aims to allow for negotiations, but he has maintained a 10 percent “baseline” tariff on almost all goods entering the US.
Jakarta’s planned royalty hike, slated to take effect in the second week of April, applies to the production of coal, nickel, copper, gold, silver and tin. The estimated adjustment ranges between 1 and 3 percent, and is expected to fluctuate based on the commodities’ market prices.
IMA executive director Hendra Sinadia expressed his hope that the government would be open to renegotiating its planned hike with mining firms.
“As the government's partners, IMA members will abide [by the new royalty rates], but we hope [for the government’s further] evaluation, considering the ongoing trade war,” Hendra said on Thursday, as quoted by Bisnis.com.
Djoko Widajatno, an advisory board member at the Indonesian Nickel Miners Association (APNI), expressed a similar concern that increasing royalties would hurt the investment climate in the domestic mining industry.
