Insight
Indonesia new mining regulation: License extensions come with additional cost
Report summary
The 2022 Indonesian mining regulation is an extension of the 2020 regulations which guaranteed extension of mining license upon the expiry of CCoW licenses. However, the continuation license in the form of IUPK (Special Mining Business License) came with certain royalty and tax changes, which the government planned to clarify in the subsequent regulations. There was a general expectation of an increase royalty rates for the continuation IUPK license. The combination of increased royalty and additional 10% levy on net profit is only partially offset by reduced corporate tax. And results in up to 9% increase in the government’s take on our base case for 2023.
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