Tuesday’s news that the government was planning to impose a hefty tax on mineral exports to potentially start this year brought down shares of mining companies on Wednesday, even as officials stressed that no final decision on the tax had been made.
Analysts in Jakarta said investors had already been selling on fears that a 2009 mining law restricting exports of unprocessed raw materials, to take full effect in 2014, would hurt profits.
“Share prices for miners are already low. The sector has been discounted since last year as market sentiment is against it,” said Priyo Santoso, chief investment officer at Mandiri Manajemen Investasi, the country’s third-biggest fund management firm.
Now the government is considering a 25 percent export tax on coal and base metals, which would start in 2012 and rise to 50 percent in 2013, the Industry Ministry’s secretary general, Anshari Bukhari, told Reuters on Wednesday.
Thamrin Sihite, director general of minerals and coal at the Energy and Mineral Resources Ministry, could not be immediately reached for comment.
Anshari said local miners were overexploiting resources before a 2014 as the 2009 law requires raw ore to be upgraded domestically by then. The new tax would curb that overproduction, he said.
News of the tax sparked a massive sell-off in local mining stocks. Shares of state nickel producer Aneka Tambang fell 1.1 percent to Rp 1,830; those of Timah, the country’s largest tin producer, lost 1.1 percent to Rp, 1,830; and nickel producer Vale Indonesia slid 1.5 percent to Rp 3,300 on the Indonesia Stock Exchange (IDX) on Wednesday.
State coal miner Tambang Batubara Bukit Asam fell 1.7 percent to Rp 20,100. The main stock gauge, meanwhile, fell 1.9 percent, after closing at a record high on Tuesday.
Negative sentiment on mining shares prompted other officials at the Energy and Mineral Resources Ministry to correct the news, according to one newswire.
Harya Adityawarman, an official at the ministry, said the tax was by no means final, Bloomberg reported him as saying.
“The proposal for such a policy must come from our ministry, because that’s our domain, and we haven’t formally suggested it,” he told Bloomberg.
Deputy Trade Minister Bayu Krisnamurthi said on Wednesday that the tax was still only an option. The immediate policy “is to ban ore exports, and not impose an export tariff,” he said.
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| A coal mine in South Kalimantan. (GA Photo) |
Analysts in Jakarta said investors had already been selling on fears that a 2009 mining law restricting exports of unprocessed raw materials, to take full effect in 2014, would hurt profits.
“Share prices for miners are already low. The sector has been discounted since last year as market sentiment is against it,” said Priyo Santoso, chief investment officer at Mandiri Manajemen Investasi, the country’s third-biggest fund management firm.
Now the government is considering a 25 percent export tax on coal and base metals, which would start in 2012 and rise to 50 percent in 2013, the Industry Ministry’s secretary general, Anshari Bukhari, told Reuters on Wednesday.
Thamrin Sihite, director general of minerals and coal at the Energy and Mineral Resources Ministry, could not be immediately reached for comment.
Anshari said local miners were overexploiting resources before a 2014 as the 2009 law requires raw ore to be upgraded domestically by then. The new tax would curb that overproduction, he said.
News of the tax sparked a massive sell-off in local mining stocks. Shares of state nickel producer Aneka Tambang fell 1.1 percent to Rp 1,830; those of Timah, the country’s largest tin producer, lost 1.1 percent to Rp, 1,830; and nickel producer Vale Indonesia slid 1.5 percent to Rp 3,300 on the Indonesia Stock Exchange (IDX) on Wednesday.
State coal miner Tambang Batubara Bukit Asam fell 1.7 percent to Rp 20,100. The main stock gauge, meanwhile, fell 1.9 percent, after closing at a record high on Tuesday.
Negative sentiment on mining shares prompted other officials at the Energy and Mineral Resources Ministry to correct the news, according to one newswire.
Harya Adityawarman, an official at the ministry, said the tax was by no means final, Bloomberg reported him as saying.
“The proposal for such a policy must come from our ministry, because that’s our domain, and we haven’t formally suggested it,” he told Bloomberg.
Deputy Trade Minister Bayu Krisnamurthi said on Wednesday that the tax was still only an option. The immediate policy “is to ban ore exports, and not impose an export tariff,” he said.
course:http://www.thejakartaglobe.com
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