Commodities, News, Nickel

Nickel Mines downplays Indonesian export tax rumours


Nickel Mines has brushed aside reports that the Indonesian Government will impose an export tax on nickel products, stating that comments on the issue have been taken out of context.

Indonesian Investment Minister Bahlil Lahadalia last week suggested the possibility of levying an export tax on nickel products, with the country looking to develop a complete supply chain for nickel.

According to Nickel Mines managing director Justin Werner, the comments relate to the promotion of further downstream developments related to nickel and electric vehicles.

“The recent comments made were in the context of promoting further downstream development and investment in the production of key nickel products for the manufacture of electric vehicle batteries given the commencement of construction of a $US1.1 billion ($1.37 billion) plant by South Korea’s LG Energy Solution and Hyundai Motor Group,” Werner said.

“Whilst we do not currently believe the rumoured export tax to be the planned policy of the government, it is worth noting that at present, approximately 50 per cent of the company’s NPI (nickel pig iron) production is sold within the Indonesia Morowali Industrial Park (IMIP).

“The company also has a memorandum of understanding or two of its RKEF (rotary kiln–electric arc furnace) lines to undergo conversion to allow the production of nickel matte which can be processed within the IMIP to a grade of greater than 75 per cent.”

Nickel Mines stated that the Indonesian Investment Minister’s comments were made without prior consultation with other ministries, including the Ministry of Energy and Natural Resources which would be responsible for introducing the tax.

An export tax would have to follow the Indonesian Government’s requirement that any ministerial regulations must be submitted to the cabinet secretary and receive presidential approval before they can be finalised and issued by the minister.

“Any contemplated export tax would therefore be required to follow this process, and only after a lengthy period of discussion and industry consultation,” Nickel Mines stated.

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