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Analysis: Govt expands Simbara system to tackle illegal nickel, tin practices
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Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan stands in front of a row of national flags. (JP/Seto Wardhana)
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n a push for better governance of the mining industry, the government has expanded the Mineral and Coal Information System (Simbara) to now cover nickel and tin toward future expansion to other minerals. The decision to expand the tracking system to the two commodities stems from a recent tin corruption case that incurred state losses Rp 271 trillion (US$17 billion).
Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan said the inclusion of tin and nickel in Simbara aimed to not only introduce better industry governance but also bring significant extra income from the two commodities through royalties of between Rp 5 trillion and Rp 10 trillion, excluding taxes.
The Simbara system integrates various government processes for mining businesses from the upstream to downstream, including the single identity number for all taxpayers, mining production plans, sales plans, sales verification, exports and port clearance, as well as fulfilling export obligations to nontax state revenue (PNBP) and foreign exchange earnings. Simbara interlinks the data systems of the Finance Ministry, the Energy and Mineral Resources Ministry, the Trade Ministry, the Transportation Ministry and Bank Indonesia.
Since its initial implementation for coal shipments in 2022, Simbara has maximized PNBP from coal by preventing various illegal practices in coal exports, such as illegal mining, royalty payment avoidance and document forgery.
According to Finance Minister Sri Mulyani, Simbara had saved potential PNBP losses of Rp 3.47 trillion from illegal coal mining and royalty avoidance, Rp 2.53 trillion from risk profiling coal entrepreneurs and Rp 1.1 trillion from outstanding receivables that would otherwise have been uncollected.
The government collected total nontax revenue of Rp 172.9 trillion from the coal and minerals industry in 2023, despite the decline in commodity prices that year. In 2022, the government collected PNBP from the mining industry totaling Rp 183.5 trillion, the highest so far.
Energy and Mineral Resources Minister Arifin Tasrif said his ministry was looking to broaden Simbara’s scope from coal to nickel and tin, and then to other minerals, including gold, bauxite and manganese, to boost income generation and better manage the nation’s mineral resources.
