REUTERS

JAKARTA INDONESIA plans to impose a 25 percent export tax on coal and base metals this year, jumping to 50 percent in 2013, an industry ministry official said on Tuesday, as the major producer of raw materials looks to boost domestic investment and take a bigger slice of mining profits.

If imposed the tax would add to a raft of regulations announced this year that have caused confusion in Indonesia’s mining sector and worried foreign investors.

It would hit the profits of both national and foreignowned companies. Late last year, the world’s top thermal coal and refined tin exporter outlined plans to introduce export taxes on metals and minerals, aiming to encourage downstream investment in the mining sector.

Talks on the export tax were put on hold last week however, with both the industry minister and energy and mineral resources minister due to discuss the plans. Although these plans remain on hold, details are emerging from government departments.

It is hoped that introducing an export tax will prevent a deluge of mineral and metal ore shipments, as producers ramp up ahead of a planned 2014 ban, Industry Ministry Secretary General Anshari Bukhari told Reuters.

“We should actually impose the export tax early this year, so that the current export rush can be avoided,” he said. “In 2013 we plan to increase the export tax to 50 percent.” Bukhari was unable to give an exact date for when the export tax would be introduced, but added that it would be imposed on miners’ export sales.

Indonesia, whose fastgrowing mining sector accounts for about 11 percent of GDP, already has export taxes in place for cocoa and palm oil, aiming to ensure domestic supplies and boost downstream industries.

The country has announced a series of new mining regulations this year, including a ban on exports of some unprocessed metals from 2014 and changes to rules on foreign ownership.