Bad News for INCO, ANTM, PTBA, and AMMN
indonesia Considers Raising Mining Royalties, Impacting Key Stocks
Table of Contents
- indonesia Considers Raising Mining Royalties, Impacting Key Stocks
- Indonesia Mining Royalty Changes: A Q&A Guide for Investors
- General Questions
- Impact on Coal commodities
- How will the royalty changes affect coal mining companies with IUP contracts (Mining Business Permit)?
- How will the royalty changes affect coal mining companies with PKP2B contracts (Coal Mining Concession Work Agreement)?
- What adjustments are planned for IUPK contracts (Extension of PKP2B)?
- Which coal companies could be most affected by these royalty changes?
- Impact on Metal Commodities
- Impact on Mining Stocks
- Royalty Rate Summary
Published: 2025-03-10
Proposed Royalty Changes in Indonesia’s Mining Sector
Jakarta – The Ministry of Energy and Mineral Resources (ESDM) held a public consultation on Saturday, March 8, 2025, regarding the draft amendment of mineral and coal (minerba) royalties. This advancement presents potential challenges for several issuers, including INCO, ANTM, PTBA, and AMMN. The proposed changes aim to increase state revenue through revised royalty rates.
Impact on Mineral Commodities
According to Investment Analyst Hendriko Gani from Stockbit Sekuritas, “In the draft, the government will increase royalty rates for a number of mineral commodities, such as nickel, copper, and gold.” This adjustment could considerably affect the profitability of mining companies involved in the extraction of these resources.
Coal Royalty and Non-Tax Revenue Adjustments
For coal commodities, the government plans to adjust royalty rates and non-tax state revenue (PNBP) as follows:
- IUP Contracts (Mining Business Permit): A royalty rate increase of +1 percentage point for coal with calories ≤4,200 and >4,200-5,200 when the Coal Reference Price (HBA) is ≥US$ 90/ton.
- PKP2B Contracts (Coal Mining Concession Work Agreement): A royalty rate increase of +1 percentage point for coal with calories ≤4,200 and >4,200-5,200 when the HBA is ≥US$ 90/ton.meanwhile, the Mining Production Revenue (PHT) for the same calories and HBA will decrease by -1 percentage point.
- IUPK Contracts (Extension of PKP2B): the tariff range will be changed. The government also plans to adjust the Corporate Income Tax (PPh) rate for companies with IUPK contracts from 22% to align with regulations in the field of income tax.
Hendriko Gani notes, “If ratified, this has the potential to suppress the performance of coal producer issuers operating with IUP permits such as Bukit Asam (PTBA) and PKP2B such as Indo Tambangraya Megah (ITMG).”
Impact on Metal Commodity Producers
The increase in royalty rates for metal commodities could also negatively impact the performance of nickel producer issuers such as Vale Indonesia (INCO), Trimegah Bangun Persada (NCKL), Aneka Tambang (ANTM), Bumi Resources Minerals (BRMS), and Amman Mineral Internasional (AMMN).
according to the planned adjustments, the commodities that will experience the highest royalty increases are copper ore and ferronickel.
With copper prices at US$ 9,362/ton in March 2025, copper ore royalties could potentially increase threefold from 5% to 15%. Meanwhile, ferronickel royalties will increase by 150% from 2% to 5%.
Potential Effects on Stock Prices
The proposed royalty increases have raised concerns among investors, potentially leading to decreased stock values for affected mining companies. The market is closely watching the developments as the government moves closer to finalizing the amendments.
Indonesia Proposes Raising Royalties Paid by Mining Companies
Indonesia is considering raising royalties paid by mining companies from commodities like coal, nickel and copper, among others, its mining ministry said.
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Mining Duties, royalties and Taxes in Indonesia
Production royalties of 2-10 per cent per ton are charged based on the higher of the benchmark sales price or the actual sales price, and a windfall profit royalty of 1 per cent for nickel matte.
Coal Mining Industry Indonesia: Higher Royalties for IUP-Holders
The government of Indonesia plans to raise royalties for coal mining companies that hold a Mining Business Permit (Izin Usaha Pertambangan, abbreviated IUP) by revising Government Regulation No. 9 – 2012 on Tariff and Types of Non-Tax Revenue in a move to generate more state income.R. sukhyar, Director General for Coal and Mineral Resources at the Indonesian Ministry of Energy and Mineral.
Indonesia Mining Royalty Changes: A Q&A Guide for Investors
Indonesia is considering raising mining royalties, a move that could considerably impact mining companies operating in the country. This Q&A guide provides investors,stakeholders,and anyone interested in the Indonesian mining sector with clear and concise answers about these proposed changes and their potential effects.
General Questions
What royalty changes are being considered in Indonesia’s mining sector?
The Indonesian Ministry of Energy and Mineral Resources (ESDM) held a public consultation on March 8, 2025, regarding a draft amendment to mineral and coal (minerba) royalties. The proposed changes aim to increase state revenue through revised royalty rates for several mineral commodities including nickel, copper, and gold, and also adjustments to coal royalty rates and non-tax state revenue (PNBP).
Why is Indonesia considering raising mining royalties?
The primary reason for raising mining royalties is to increase state revenue. The Indonesian government aims to capture a larger share of the profits generated by the mining sector.
When were the royalty changes discussed?
The public consultation regarding the draft amendment was held on Saturday, March 8, 2025.
Impact on Coal commodities
How will the royalty changes affect coal mining companies with IUP contracts (Mining Business Permit)?
For coal commodities under IUP contracts, the government plans a royalty rate increase of +1 percentage point for coal with calories ≤4,200 and >4,200-5,200 when the Coal Reference Price (HBA) is ≥US$ 90/ton.
How will the royalty changes affect coal mining companies with PKP2B contracts (Coal Mining Concession Work Agreement)?
For coal commodities under PKP2B contracts, a +1 percentage point royalty rate increase is proposed for coal with calories ≤4,200 and >4,200-5,200 when the HBA is ≥US$ 90/ton. However, the Mining Production Revenue (PHT) for the same calories and HBA will decrease by -1 percentage point.
What adjustments are planned for IUPK contracts (Extension of PKP2B)?
For IUPK contracts, the tariff range will be changed.Additionally, the government plans to adjust the Corporate Income Tax (PPh) rate for companies with IUPK contracts from 22% to align with regulations in the field of income tax.
Which coal companies could be most affected by these royalty changes?
According to Investment analyst Hendriko Gani from Stockbit sekuritas, coal producer issuers operating with IUP permits such as Bukit Asam (PTBA) and PKP2B such as Indo Tambangraya megah (ITMG) could be negatively impacted if the proposed changes are ratified.
Impact on Metal Commodities
How will the royalty changes affect metal commodity producers?
An increase in royalty rates for metal commodities could negatively impact the performance of nickel producer issuers such as Vale indonesia (INCO), Trimegah Bangun Persada (NCKL), Aneka Tambang (ANTM), Bumi Resources Minerals (BRMS), and Amman Mineral Internasional (AMMN). The commodities that will experience the highest royalty increases are expected to be copper ore and ferronickel.
What is the potential royalty increase for copper ore?
With copper prices at US$ 9,362/ton in March 2025, copper ore royalties could potentially increase threefold from 5% to 15%.
What is the potential royalty increase for ferronickel?
Ferronickel royalties will increase by 150% from 2% to 5%.
Impact on Mining Stocks
Which mining stocks could be affected by the royalty increases?
Several mining stocks are potentially affected:
Coal:
Bukit Asam (PTBA)
Indo Tambangraya Megah (ITMG)
Nickel and other Metals:
Vale Indonesia (INCO)
Trimegah Bangun Persada (NCKL)
Aneka Tambang (ANTM)
Bumi Resources Minerals (BRMS)
* Amman Mineral Internasional (AMMN)
How could these royalty increases affect stock prices of mining companies?
The proposed royalty increases have raised concerns among investors, potentially leading to decreased stock values for affected mining companies. The market is closely watching the developments as the government moves closer to finalizing the amendments.
Royalty Rate Summary
| Commodity | Current Royalty Rate (Example) | Proposed Royalty Rate (Example) | Change |
| :————- | :—————————– | :——————————– | :——– |
| Copper ore | 5% | 15% | +200% |
| Ferronickel | 2% | 5% | +150% |
| Coal (IUP/PKP2B, HBA ≥US$ 90/ton, ≤5,200 calories) | varies by Coal Reference Price | +1 percentage point | Increased |
It’s important to note that these values are based on the data available from March 2025 and are subject to change as the government finalizes the amendments.