Mineral Benchmark Price Formula Revised, State Revenue Could Increase!
The Ministry of Energy and Mineral Resources (ESDM) has made changes to the formula for the Mineral Benchmark Price (HPM) for nickel, copper, bauxite, and other minerals. This is set out in Ministerial Decree No. 144 of 2026 on guidelines for determining benchmark prices for metallic minerals and coal.
Director General of Minerals and Coal (Dirjen Minerba) at the Ministry of ESDM, Tri Winarno, explained that the price formula adjustment aims to correct the domestic nickel ore prices, which have been deemed too low compared to international market prices.
The formula change is intended to increase state revenue from the royalty sector. He believes that with the new, more accurate calculation, the contribution from the nickel mining sector to state income will rise.
“Yes, there will be some additional (state revenue),” he said when met at the DPR RI Building in Jakarta on Wednesday (15/4/2026).
Tri revealed the reason for correcting the price formula is the significant price gap between domestically produced nickel ore and export prices in competitor countries such as the Philippines and New Caledonia. His side found that Indonesia’s nickel prices have not captured the premium value that should be included in the HPM calculation.
“Indeed, the ore prices here were too low previously. You can check with the association that there was a premium back then. That premium was not captured in the HPM price at that time. So we made a correction. That’s roughly the point,” Tri explained.
The new formula adjustment includes the application of a correction factor and the valuation of other mineral contents in nickel ore. Besides nickel, elements such as iron (ferro), cobalt, and chromium are now factored into the price formula.
“Just the correction factor and valuing ferro—ferro is iron—cobalt and chromium,” he added.
The government hopes this new regulation will be more adaptive to market dynamics. ESDM is committed to continuously updating rules to respond to commodity price changes, benefiting both the state and industry players.
“Hopefully it will be good, something like that. I don’t have a price target or anything, but the point is we keep updating for any changes that occur, and hopefully we are adaptive to the changes,” he emphasised.
For context, the regulation was signed by Minister of ESDM Bahlil Lahadalia on 10 April 2026 and takes effect from 15 April 2026.
Referencing the rule change, there is a significant alteration in the price formula calculation for Nickel Ore. In the latest regulation, the nickel ore price formula now includes calculations for iron, iron ore, cobalt, and chromium ore, as follows:
Formula:
HPM Nickel Ore = [(% Ni * CF Nickel Ore * HMA Nickel) + (% Fe * CF Accompanying Iron * HMA Iron Ore * 100) + (% Co * CF Accompanying Cobalt * HMA Cobalt) + (% Cr * CF Accompanying Chromium * HMA Chromium Ore * 100)] * (1-MC)
Notes:
HPM Nickel Ore is the metallic mineral benchmark price in the form of nickel ore in US$/WMT.
% Ni is the Ni content in nickel ore.
% Fe is the Fe content in nickel ore, with the provision that accompanying iron mineral is calculated when Fe content ≤ 35%.
% Co is the Co content in nickel ore, with the provision that accompanying cobalt mineral is calculated when Co content ≥ 0.05%.
% Cr is the Cr content in nickel ore.
CF Nickel Ore is the Corrective Factor for Nickel Ore, a percentage value accommodating the correction value for nickel ore in HPM Nickel Ore, with the provision: a. CF for nickel ore with 1.6% Ni = 30%. b. CF value will increase/decrease by 1% for every 0.1% increase/decrease in Ni content.
CF Accompanying Iron is the Corrective Factor for Accompanying Iron, a percentage value accommodating the correction value for accompanying iron mineral in HPM Nickel Ore, set at 30%.
CF Accompanying Cobalt is the Corrective Factor for Accompanying Cobalt, a percentage value accommodating the correction value for accompanying cobalt mineral in HPM Nickel Ore, set at 30%.
CF Accompanying Chromium is the Corrective Factor for Accompanying Chromium, a percentage value accommodating the correction value for accompanying chromium mineral in HPM Nickel Ore, set at 10%.
HMA Nickel is the reference mineral price for nickel in the HPM Nickel Ore calculation formula.
HMA Iron Ore is the reference mineral price for iron ore in the HPM Iron Ore calculation formula.
HMA Cobalt is the reference mineral price for cobalt in the HPM Cobalt calculation formula.
HMA Chromium Ore is the reference mineral price for chromium ore in the HPM Chromium Ore calculation formula.
MC (Moisture Content) is the percentage of water content in nickel ore.
Meanwhile, referencing Ministerial Decree 266/2025, the calculation only referenced the Nickel Reference Mineral Price (HMA).
Formula:
HPM Nickel Ore = % Ni * CF * HMA Nickel
Notes:
HPM Nickel Ore is the metallic mineral benchmark price in the form of Nickel Ore in US$/DMT.
% Ni is the Ni content in Nickel Ore.
CF is the Corrective Factor, a value (percentage) accommodating discounts or premiums on the quality of the commodity being traded, with the provision: a. CF for Nickel Ore with 1.9% Ni = 20%; and b. CF value will increase/decrease by 1% for every 0.1% increase/decrease in Ni content.
HMA Nickel is the reference mineral price for Nickel in the HPM calculation formula.