Bahlil Officially Changes Mineral Benchmark Price Formula, Business Owners Speak Out

Jakarta, CNBC Indonesia - The government has officially implemented a new formula for the Mineral Benchmark Price (HPM) starting from 15 April 2026. This policy is contained in Ministerial Decree No. 144.K/MB.01/MEM.B/2026 on Amendments to Ministerial Decree No. 266/2025 regarding Guidelines for Determining Benchmark Prices for the Sale of Metal Mineral and Coal Commodities.

Chairman of the Indonesian Mining Experts Association (PERHAPI) Sudirman Widhy Hartono assessed that the HPM formula change will have differing impacts on business players in the upstream and downstream nickel sectors.

According to him, for nickel mining permit (IUP) holders, the HPM revision opens opportunities for price increases in selling ore to processing plants. This increase applies to both saprolite and limonite types of nickel ore.

In fact, for limonite, the increase could reach more than 100%, as the cobalt content in limonite is now factored into the formula.

“This means that the profits obtained by miners will experience a significant increase,” Widhy told CNBC Indonesia on Wednesday (15/4/2026).

However, on the other hand, he warned that this policy could become a heavy burden for the nickel processing industry (smelters). The HPM increase will raise production cost burdens amid global nickel prices that have not fully recovered.

“Even without the HPM increase, the operational cost burden for nickel processing plants is already high, while world nickel prices have not returned to their best levels,” he said.

For example, for smelters based on Rotary Kiln Electric Furnace (RKEF) producing Nickel Pig Iron (NPI) and ferronickel, the cost pressure mainly comes from rising energy prices, following increases in coal and fuel oil prices. Meanwhile, NPI prices in the global market remain under pressure due to weak demand and overproduction conditions.

Meanwhile, smelters based on High Pressure Acid Leaching (HPAL) that process limonite into Mixed Hydroxide Precipitate (MHP) face even greater pressure. This is triggered by the surge in sulphuric acid prices as the main input for the leaching process.

“Sulphuric acid, which is the main material for the leaching process, has experienced a significant increase over the past three years, from below US$100/ton previously to now reaching US$250/ton,” he said.

According to him, with the limonite price increase of more than 100%, this will certainly cause HPAL plants to face the greatest pressure.

Based on PERHAPI’s calculations, the combination of the HPM increase and the sulphuric acid price surge could potentially push nickel production costs in the form of MHP above US$17,000 per tonne. This figure is almost equivalent to the current nickel price in the global market based on the London Metal Exchange.

His side understands the background and purpose of this nickel HPM change, one of which is to increase nickel royalties. However, PERHAPI emphasised that the policy should also consider the sustainability of the nickel downstream industry.

“Because if the economics of nickel processing plants become unattractive, the dominant impact and effects will be long-term, as it will cause nickel processing plants to stop operations,” he said.

As is known, this regulation has been widely discussed by the Ministry of Energy and Mineral Resources some time ago. Director General of Minerals and Coal (Dirjen Minerba) of the Ministry of Energy and Mineral Resources Tri Winarno revealed that the new nickel HMA formula will take into account the value of associated minerals in nickel ore.

According to him, these highly economically valuable associated minerals, such as cobalt and iron, have not been optimally priced so far. “Every month, we report that previously it was based on LME (London Metal Exchange) with certain correction factors. For cobalt, we price it, for iron we price it, so the reference price can increase,” Tri explained some time ago.

The changes prepared by the government, said Tri, are purely on the calculation formula, namely the correction factor and valuation of associated minerals. Meanwhile, the issuance and determination schedule for the reference price will continue routinely as usual without changes in the release period.

“If it’s issued every two weeks, we still issue it. The formula changes. The formulas,” he stressed.

For information, the HMA formula change for nickel is part of the government’s efforts to increase state revenues from the mineral sector. This is also in line with the directives of Indonesian President Prabowo Subianto, who requested the optimisation of state revenues from natural resources, particularly the mineral sector.