Government Adjusts Royalty Rates for Gold, Copper, Nickel and Others: Here's Why

The Ministry of Energy and Mineral Resources (ESDM) plans to readjust royalty rates for several strategic mineral commodities such as gold, copper, nickel, and tin. This will be enshrined in a revision of Government Regulation (PP) No. 19 of 2025 on the Types and Rates of Non-Tax State Revenue (PNBP) applicable to the Ministry of ESDM. Through this plan, the government seeks to synchronise levy rates with the current dynamics of the commodity market. From documents received by CNBC Indonesia, the reason for this effort is that the Ministry of ESDM assesses there is potential for excessive profits or windfall profits obtained by business actors due to surges in global mineral commodity prices. The price increases for commodities such as gold, copper, silver, tin, and nickel are deemed to need to be balanced with contributions to the state treasury. In addition to targeting main commodities, this regulatory revision will also regulate royalty rates for by-product minerals that have high economic value. The commodity cluster arrangement now includes cobalt as a by-product of nickel matte, as well as adjustments for zinc concentrate and lead concentrate. This policy also considers the findings of a study by the Corruption Eradication Commission (KPK) on the importance of imposing royalties on valuable by-product minerals. The aim is to ensure that every resource potential extracted from Indonesian soil provides maximum added value to state revenues. In addition to strengthening royalties on the downstream side, the government is adding types and fixed contribution rates for non-metallic minerals and rocks located in offshore areas beyond 12 nautical miles. Overall, the tariff update plan is implemented based on directives from central leadership to optimise state revenues sustainably. Price Developments Copper Based on ESDM Ministry records, since October 2025 Period II, the Copper Reference Mineral Price (HMA) has exceeded 10,000 US/dmt, sotheroyaltyrateunderPP19/2025isalreadyatthehighestinterval.In2026, theupwardtrendincopperpricescontinues, wheretheCopperHMAforFebruaryPeriodIIoncereached13, 000US/dmt. The average Copper HMA for 2026 is 12,655.16 US/dmt, farabovethe2025averageof9, 819.48US/dmt. Silver Since November 2025 Period I, the Silver HMA has exceeded 50 US/toz.InFebruary2026PeriodII, theSilverHMAwasatthehighestpriceof95.35US/toz and began to decline to 76.69 US/tozinMay2026PeriodI.TheaverageSilverHMAfor2026is79.27US/toz, twice as large as 2025 with an average of 38.23 US/toz.NickelThroughout2025, theNickelHMAtendedtomovedownwardfrom16, 126US/dmt (April Period I) to 14,599 US/dmtinDecember2025PeriodII.Throughout2025, theNickelHMAremainedinthefirstlayerunderthePP19/2025scheme.Atthebeginningof2026, theNickelHMArosetothehighestpointinFebruary2026PeriodIat17, 774US/dmt and then began to decline to 16,933.57 US/dmtinMay2026PeriodI.TheaverageNickelHMAfor2026is16, 822.29US/dmt, larger than 2025 with an average of 15,177.12 US/dmt.TinSinceDecember2025, theTinHMAhasexceeded4, 000US/ton, so the royalty rate under PP 19/2025 is already at the highest interval. At the beginning of 2026, tin prices remained above 40,000 US/dmt, evenrisingtothehighestpointinMarch2026at55, 205US/ton. The average Tin HMA for 2026 is 51,101.46 US/ton, farabovethe2025averageof34, 353.88US/ton. Proposed Tariffs Copper Proposed royalty rate for copper concentrate imposed on PT AMNT concentrate products - Copper HMA <7,000 US/dmtincreasedto9/dmt increased to 11% from previously 7.5% - Copper HMA 10,000 to <13,000 US/dmtincreasedto12/dmt increased to 13% from previously 10% Proposed royalty rate for copper cathode imposed on PT AMNT concentrate products - Copper HMA <7,000 US/dmtincreasedto7/dmt increased to 8% from previously 5% - Copper HMA 10,000 to <13,000 US/dmtincreasedto9/dmt increased to 10% from previously 7% Gold Proposed Gold Royalty Rate in the form of adjustment of intervals and rates from HMA 2,500 US/toztothehighestinterval ≥ 5, 000US/toz, to accommodate price surges. - Gold HMA <2,500 US/troyouncesubjectto14/troy ounce rate 7% - Gold HMA 2,500 to <3,000 US/troyouncesubjectto15/troy ounce rate 10% - Gold HMA 3,000 to <3,500 US/troyouncesubjectto16/troy ounce rate 11% - Gold HMA 3,500 to <4,000 US/troyouncesubjectto17/troy ounce rate 12% - Gold HMA 4,000 to <4,500 US/troyouncesubjectto18/troy ounce rate 14% - Gold HMA 4,500 to <5,000 US/troyouncesubjectto19/troy ounce rate 15% - Gold HMA ≥5,000 US/troyouncesubjectto20/troy ounce rate 16% Silver Proposed Silver Royalty Rate in the form of change from the previous flat 5% rate to a progressive rate from the lowest interval HMA < 60 US/toztoaccommodatepriceincreases. − SilverHMA < 60US/toz subject to 5% rate - Silver HMA 60 to <80 US/tozsubjectto6/toz subject to 7% rate - Silver HMA ≥100 US/tozsubjectto8/ton increased to 14% from previously Nickel HMA <18,000 US/tonrate14/ton increased to 15% from previously