July 24, 2014 / 11:40 AM / in 3 years

Indonesia to cut mineral export tax if miners pay smelter bond- official

JAKARTA, July 24 (Reuters) - Indonesia will cut the tax levied on mineral concentrate exports to less than 10 percent from 20-25 percent for miners that pay a bond as a guarantee they will build a smelter later, a government official said on Thursday.

The move will allow mining companies to restart exports even if they have yet to complete smelters that would allow them to process more ore on Indonesian soil.

“If you want to build a smelter then you’re eligible for a lower tariff for the concentrate export tax,” fiscal policy chief Andin Hadiyanto told Reuters, adding that no export tax would apply to finished metals.

The change comes six months after the government imposed a controversial escalating tax on shipments that brought copper exports to a halt. The tax was intended to force miners to develop smelters and mineral processing facilities and part of a government push to derive bigger returns from Indonesia’s mineral resources.

The new rate would be less than 10 percent, and scale down to zero as a firm’s smelter construction progresses, Hadiyanto said, while miners that did not have smelter projects in the works will remain subject to the escalating tax rate of up to 60 percent. (Reporting by Simon Webb, Randy Fabi and Gayatri Suroyo; Editing by Raju Gopalakrishnan)

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