Mineral Export Duty Provisions Amended, Smelter Requirements are Stricter

The government has tightened the imposition of export duties on exports of processed metallic mineral products. Among them is increasing the limit for completion of the construction of a refining facility or smelter from a minimum of 30% to a minimum of 50%.

In addition, the government also abolished the imposition of a 0% export duty for metallic mineral exports. Until now, the lowest export duty rate that will be imposed on exports of metallic mineral processing products varies, depending on the type of metallic mineral products produced.

The changes to the provisions are contained in Minister of Finance Regulation (PMK) Number 71 of 2023 which amends PMK Number 39/PMK.010/2022, especially in article 11 and attachments E and F.

The new regulation came into force on 17 July 2023, or three days after the regulation was promulgated on 14 July 2023.

In detail, the level of smelter completion which is a criterion for the imposition of export duty rates is divided into three stages—the first stage is for completion rates of at least 50% to below 70%.

The second stage is for completion rates ranging from 70% to less than 90%. Then the third stage starts from 90% to 100%.

Henceforth, the level of completion of the smelter must be included in the export recommendation issued by the Ministry of Energy and Mineral Resources.

The amount of export duty rate, which was originally flat or the same for all types of processed metallic mineral products, is now determined differently.

Related to this, the government also cut the types of metallic mineral processing products subject to export duties. In the previous regulation, there were 10 types of metallic minerals subject to export duties. Meanwhile, in the latest rule, there are only four.

Types of Metallic Minerals in Old Rule

Types of Metallic Minerals in New Rule

Copper concentrate with content ≥ 15% Cu Iron concentrates (hematite, magnetite) with content of ≥ 62% Fe and ≤ 1% TiO2 Lateritic iron concentrates (gunite, hematite, magnetite) with content ≥ 50% Fe and content (Al2O3+SsiO2) ≥ 10% Iron sand concentrate (lamella magnetite-ilmenite) with content of ≥ 56% Fe and 1% < TiO2 ≤ 25% Iron sand concentrate pellets (lamellae magnetite-ilmenite) with content ≥ 54% Fe and 1% < TiO2 ≤ 25% Manganese concentrate with content ≤ 49% Lead concentrate with content ≥ 56% Pb Zinc concentrate with content ≥ 51% Zn Ilmenite concentrate with content ≥ 45% TiO2 Rutile concentrate with ≥ 90% TiO2 content

Copper concentrate with content ≥ 15% Cu  Lateritic iron concentrate (gutite, hematite, magnetite) with grade ≥ 50% Fe and grade (Al2O3+SsiO2) ≥ 10% Lead concentrate with grade ≥ 56% Pb Zinc concentrate with content ≥ 51% Zn

Multirates

In addition to making rates more detailed, the government is also differentiating export duty rates that apply specifically to exports of metal mineral processing products in 2023 and 2024 and beyond.

No	Description	Rates up to 31 December 2023			Rates up to 1 January -31 May  2024
1	Copper concentrate grade ≥ 15% Cu	10%	7,5%	5%	15%	10%	7,5%
2	Lateritic iron concentrates (gunite, hematite, magnetite) with content ≥ 50% Fe and content (Al2O3+SsiO2) ≥ 10%	7,5%	5%	2,5%	10%	7,5%	5%
3	Lead concentrate with content ≥ 56% Pb	7,5%	5%	2,5%	10%	7,5%	5%
4	Zinc concentrate with content ≥ 51% Zn	7,5%	5%	2,5%	10%	7,5%	5%

The government argued that this change was made to encourage the completion of the construction of metal mineral smelter facilities in the country and support downstream policies. Especially the downstream policies of commodities such as copper, iron, lead, and zinc. (ASP/SYF/KEN)