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View all search resultsNew pricing rule offers miners little relief from profit pinch
Industry experts have bemoaned the latest rule on coal and mineral sales, which maintains the government-set benchmark prices for calculating royalties and taxes despite allowing more pricing flexibility, burdening miners with a widening gap between sales prices and royalties as global rates fall.
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A worker observes a haul truck and a high track bulldozer operate on Jan. 8, 2014, at a nickel mine in Sorowako, South Sulawesi. (Reuters/Yusuf Ahmad)
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oal and mineral miners say the government’s new regulation to grant more pricing flexibility for sales contracts has offered little relief and their profit margins remain under pressure, since royalties and taxes are still tied to national benchmarks that are typically higher than market rates.
Energy and Mineral Resources Ministerial Decree No. 268.K/MB.01/MEM.B/2025, signed on Aug. 8, allows sales below the benchmark price if the buyer agrees. The new rule supersedes ministerial decree No. 72.K/2025 issued in March, which was criticized for its inflexibility over a strict requirement that all sales must meet or exceed the government’s benchmark prices for coal (HPB) and minerals (HPM).
However, the new rule still mandates mining permit holders to use the HPB and HPM for calculating royalties and taxes.
Djoko Widajatno, an advisory board member of the Indonesian Nickel Miners Association (APNI), said the latest decree continued to place a significant financial burden on nickel miners.
“Margins are under pressure because royalties calculated [based on] the HPM will be higher, while the realized selling price could be lower,” Djoko told The Jakarta Post on Tuesday.
For example, if nickel ore with an HPM of US$100 per tonne was sold for $80 per tonne, the miner would pay up to $19 in royalties according to the current progressive tariff of 14 to 19 percent. The miner would therefore earn net revenue of $61 per tonne, whereas a royalty calculation based on market price would generate $64.8 per tonne in revenue.
Moreover, Djoko said, the new rule had prompted investors in downstream technologies to take a wait-and-see approach amid the ongoing legal inconsistency and resulting business uncertainty, at a time when investors were already hesitant due to Indonesia’s broader economic challenges.
