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The Ministry of Energy and Mineral Resources Asks Nickel Companies to Follow Benchmark Prices

Tue 10 May 2022, 14:24 PM



The Ministry of Energy and Mineral Resources (ESDM) has asked nickel business actors, both miners and smelter entrepreneurs, to comply with the applicable Mineral Benchmark Prices (HPM). This was revealed in a copy of the Letter of the Directorate General of Mineral and Coal (Ditjen Minerba) Number T-1780/MB.04/DJB.M/2022 obtained by

The letter, dated April 26, 2022, contains the obligation to use metal HPM in the sale and/or purchase of nickel commodities. 
This letter, which was signed by the Director General of Mineral and Coal, Ridwan Djamaluddin, is addressed to the Board of Directors/Management of Nickel Commodity Mining Business License Holders and Directors/Management of Nickel Commodity Industrial Business License Holders/Facilities for Processing and/or Purification of Nickel Commodities.

Meanwhile, the points in the letter relate to the implementation of the provisions of the Regulation of the Minister of Energy and Mineral Resources Number 07 of 2017 concerning Procedures for Setting Standard Prices for Metal and Coal Mineral Sales as amended several times, most recently by Regulation of the Minister of Energy and Mineral Resources Number 11 year 2020. 

In addition, it is also related to the issuance of the Decree of the Minister of Energy and Mineral Resources Number 67.K/HK.02/MEM.B/2022 concerning Reference Metal Mineral Prices and Reference Coal Prices for April 2022.

"The calculation of the nickel metal HPM formula for April 2022 must use the Reference Mineral Price (HMA) determined based on the Decree of the Minister of Energy and Mineral Resources Number 67.K/HK.02/MEM.B/2022 concerning Reference Metal Mineral Prices and Coal Prices. Reference for April 2022," said Ridwan as quoted from the first point in the letter, Tuesday (10/5).

Furthermore, holders of nickel commodity mining business permits and holders of industrial business permits/processing and/or refining facilities for nickel commodities in selling and/or purchasing nickel ore must refer to the HPM for nickel metal. Meanwhile, the holder of a nickel commodity mining business permit and the holder of an industrial business permit/processing and/or refining facility for nickel commodities selling and/or purchasing nickel ore without referring to the metal HPM will be subject to sanctions in accordance with the provisions of the legislation.

Previously, the polemic on the selling price between the miners and the smelter industry did occur, especially in the midst of high nickel ore prices. Secretary General of the Indonesian Nickel Miners Association (APNI) Meidy K. Lengkey explained that the HPM for nickel metal in April 2022 reached US$ 80 per wet metric ton (wmt). This value is higher than the March 2022 HPM which was only US$ 50 per wmt. In this condition, many smelter business actors wish to enter into contracts with miners at prices in March and not at prices in April.

This condition is also considered to be burdensome for mining business actors. 
This is because business actors will pay their obligations to the state in accordance with the applicable HPM. This means, if the miner sells at a price of US$ 50 per wmt, then the amount of liability that must be paid refers to the applicable HPM of US$ 80 per wmt.

"The year-end tax, corporate income tax will be extraordinary because the price has been set," explained Meidy to Kontan, Tuesday (10/5). Meidy also hopes that in the future all business actors can follow the rules that have been set.



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