-- Dozens of minerals face new export tax of 20% -finance minister
-- Taxes could apply to all mineral exports -economy minister
-- Taxes are in addition to a partial ban on the export of metal ores applied last week
-- Taxes likely won't apply to most large-scale miners
-- Tax dependent on pending finance ministry decree
(Adds background on the imposition of a partial ban and export taxes, details on the new development, Moody's assessment of Antam.)
JAKARTA (Dow Jones)--Indonesia plans to introduce taxes on the export of dozens of minerals, three ministers said Wednesday, adding to a list of 14 metal ores that were made subject to new taxes last week.
Finance Minister Agus Martowardojo said on the sidelines of a meeting on inflation that Indonesia would introduce a 20% tax on the export of 65 commodities, including 34 minerals, 10 non-metal ores, and 21 metal ores. The breakdown corresponds with a trade ministry decree last week that listed the export tax codes for 65 minerals in varying concentrates and outlined procedures for their export. The decree, introduced May 7, came in conjunction with an Energy Ministry ban on the export of 14 metal ores, which is applicable to only some miners.
The announcement comes as a surprise to many in the industry who had been waiting for clarity on the implementation of a ban--and a tax that allows miners to avoid the ban--since February. Indonesia's mining sector has received the lion's share of record foreign direct investment in Indonesia recently, but miners regularly point to confusion and changing government regulations that keep the sector from growing even more.
Two other ministers differed slightly with Martowardojo on the details of the new taxes.
Coordinating Minister for the Economy Hatta Rajasa told Dow Jones Newswires that "all mineral exports will be taxed," adding that the total number could reach more than 85.
Minister of Energy and Mineral Resources Jero Wacik confirmed this, telling Dow Jones Newswires that "We will tax 85 more minerals on top of the 14 minerals, as it's difficult for Customs to differentiate the kind of minerals."
He said the decree would be issued later this month but would "come into effect immediately," while Martowardojo said the decree could be issued as early as late Wednesday.
The finance minister added that coal wasn't among the minerals included in the new taxes.
The ban that went into effect last week was on the export of 14 mineral ores by miners that were issued mining licences (known as IUPs) after the 2009 Mining Law took effect. Most large-scale miners, including Freeport-McMoRan Copper & Gold Inc. (FCX), Newmont Mining Corp. (NEM) and Vale Indonesia operate under Contracts of Work, and weren't affected by the ban.
IUP miners must meet a number of conditions to be exempt from the ban, which include proving the legality of operations and paying the new export taxes.
Moody's said last week that the tax would be credit-negative for PT Aneka Tambang (ANTM.JK), which it said derived around 70% of its revenue from exports of nickel, gold and bauxite last year.
The credit ratings service said given that the metals are sold at international prices, the company won't be able to fully pass on the export tax to customers.
The government has said that the taxes announced last week are designed to push miners to add value to the industry by developing refining capabilities ahead of a total ban on ore exports in 2014.
Mineral exports accounted for 5.5% of Indonesia's $203.62 billion total exports in 2011.
Trade ministry decree (list of 65 minerals and mineral compounds on pp. 17-19): http://tinyurl.com/7o7lwk7
-By Joko Hariyanto and Farida Husna, Dow Jones Newswires; +62 21 3983 1277; ben.otto@dowjones.com
