Indonesia will set a monthly price floor for its coal and minerals including tin, nickel and copper production – starting this month. The ministry of energy and minerals will set the price floors in the beginning of every month, it said. "The purpose is to ensure that the Indonesian government will get the most accurate revenues it deserves through royalties and taxes," Bambang Gatot Ariyono, director of coal, minerals and geothermal department at the ministry, told Metal Bulletin. "Every type of commodity will have different ways of benchmarking, but all will refer back to international market prices. Some will take LME average monthly prices or other internationally accepted indexes," said Ariyono, declining to specify.
Under the new decree, by the tenth of every month, companies will need to report their monthly sales, including sales volume, prices, commodity grade, point of sale, and sales destination, to the governor of the province the business operations are located in, and the directorate general in the ministry of energy and minerals. All necessary documents including invoice, bill of lading, and shipping time sheet have to be attached in the reports.
Currently the main controls on tin exports are via the trade ministry’s export licencing system, one condition of which is that a royalty of 3% has been paid on all tin to be shipped. ITRI understands that in the future all royalty payments may be calculated based on the government reference price rather than specific contract prices for each shipment. 33 companies currently have export licences, although about private 18 smelters that source most of their tin concentrate supply from small miners have stopped operating so far this year, Dharma Sutomo, chairman of the Indonesia Tin Business Association told Reuters.
