【SMM Nickel Flash News】Indonesia to Include Royalty Factor in RKAB Evaluation, Higher-Royalty Miner May Receive Priority

Indonesia’s Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that the royalty contributions paid by enterprises will become one of the key considerations in the evaluation for the approval of the Mining Work Plan and Budget (RKAB).

Bahlil stated on August 3: "If some companies pay higher royalties while others pay lower ones, who should be given priority? Naturally, I must prioritize those that pay higher royalties. "

This policy means that mining enterprises' contribution to state revenue may become an additional evaluation factor in future RKAB quota allocation. In addition to production capacity, market conditions and domestic downstream industry demand, royalty contributions may also affect approval priorities.

At present, the Indonesian government is still reviewing the RKAB applications submitted by mining enterprises, and will determine the scale of additional production quotas based on market supply and demand. The final quota allocation has not yet been announced, and relevant data is still under calculation.

SMM believes that the inclusion of royalty contributions in the RKAB evaluation criteria may lead to more selective quota approvals in the future, giving priority to mining enterprises with higher contributions to state revenue. We will continue to monitor the specific implementation of this criterion and its potential impact on the allocation of Indonesia's future nickel ore supply.