Indonesia's Ministry of Energy and Mineral Resources has announced a review of tax incentives granted to nickel smelters, particularly those producing nickel pig iron (NPI) and ferronickel (FeNi). Deputy Minister Yuliot Tanjung stated that these incentives, initially provided to pioneer industries, may no longer apply as the industry now has many commercial participants and the sector has seen significant growth.
The government is also evaluating alternative incentives while encouraging downstream development in mineral and coal industries to add value to the nation. Companies currently benefiting from tax exemptions will retain them until their term expires, but new investment proposals for capacity expansion may no longer qualify.
This policy shift aligns with Indonesia's broader strategy to conserve nickel reserves and redirect investments toward downstream industries such as electric vehicle battery production. Discussions on refining the definitions of pioneer industries and tax holidays are ongoing, with further government announcements expected.
Written by Cora Ji, jiruyan@mysteel.com
