Indonesia plans to impose royalties on multiple metals

Cobalt prices on the London Metal Exchange stood at $29,210 a ton today, up 5.261 TP3T from the previous session's close, while nickel prices were down 0.351 TP3T at $16,493 a ton, well below the record high selling price of 2022-2023.The cobalt content of nickel ore traded in 2023-2024 is about 0.11 TP3T, and the government is expected to collect about $600 million in additional revenue if royalties are levied on cobalt. It has been proposed that the government levy a royalty on the associated cobalt in nickel ores instead of increasing the progressive royalty rate on the nickel itself. Cobalt is currently excluded from the category of minerals on which royalties are levied, but a proposal by the Directorate General of Mining of the Ministry of Energy and Mineral Resources to levy a single-rate royalty of 1.51 TP3T on cobalt and 21 TP3T on cobalt associated with nickel matte does not cover the cobalt price calculation formula, which could lead to confusion over implementation. Since 2023, Indonesia has become the world's second largest producer of cobalt, and its cobalt production is expected to account for nearly 201 TP3T of the world's total by 2030.Cobalt is not currently subject to royalty, and the Directorate General of Mining has also proposed to increase progressive royalty rates for base metals such as coal, nickel, copper, and tin, as well as levying a fee on a number of minerals that have not been previously subjected to royalties, such as diamonds, silver nitrate, cobalt etc.