Reuters reported that Indonesia’s government is drafting a new mining export tax that would see drastic cuts to the base rate tax to be paid by international mining companies. Producers such as Freeport McMoRan Copper & Gold (NYSE:FCX) and Newmont Mining Corp (NYSE:NEM) have argued that they should not have to pay the controversial export tax on the basis that it violates their contracts, Reuters wrote.
As quoted in the publication:
Coal and Minerals Director General Sukhyar said on Friday the new draft regulation meant the export tax would start below 10 percent and would be linked to a company’s progress in building a smelter.”Yesterday I had discussions with the finance ministry and they said the draft is already finalized,” Sukhyar told reporters, adding that it been agreed by the mining, industry and finance ministries. Finance Minister Chatib Basri said on Friday the draft tax regulation still needed to be approved by chief economics minister Chairul Tanjung and President Susilo Bambang Yudhoyono.