ASIATODAY.ID, JAKARTA — Indonesia has officially overhauled its mineral benchmark pricing (HPM) for strategic commodities nickel and bauxite, marking a major shift in the governance of its mining sector. The new policy, stipulated under Ministerial Decree No. 144/2026 and effective April 15, 2026, introduces a more complex and quality-based pricing framework.
Through the Ministry of Energy and Mineral Resources (ESDM), the government is moving away from a simplified pricing model toward one that reflects the actual composition and quality of mineral ores.
Director General of Minerals and Coal, Tri Winarno, said the reform is a response to increasingly volatile global markets and aims to ensure fairness across the industry.
“This new formula is designed to be more adaptive, transparent, and capable of optimizing state revenue,” he stated on April 14, 2026.
Nickel Pricing Now Based on Multi-Element Composition
The most significant changes apply to nickel. Previously, pricing was largely determined by nickel content alone. Under the new formula, additional variables are now considered, including iron (Fe), cobalt (Co), chromium (Cr), and moisture content.
However, these elements only contribute to pricing if they meet specific thresholds, such as a minimum iron content of 35% and cobalt content of 0.05%.
The government has also introduced differentiated corrective factors (CF):
– 30% for nickel, iron, and cobalt
– 10% for chromium
This approach places greater emphasis on overall ore quality, pushing mining companies to improve production standards. Major players such as PT Vale Indonesia are expected to adjust their operational strategies accordingly.
Bauxite Pricing Tightened with Silica and Moisture Controls
For bauxite, the government has added reactive silica (R-SiO₂) and moisture content as price-reducing factors.
Under the new scheme:
– R-SiO₂ up to 2% incurs no penalty
– Above 2%, every 0.5% increase reduces the price by US$1/dmt, capped at a maximum deduction of US$3.5/dmt
Meanwhile, aluminum oxide (Al₂O₃) remains the primary price driver:
– Above 47% → price increases by US$1.4/dmt per 1% increment
– Below 47% → price decreases at the same rate
This framework significantly raises the importance of ore quality in determining market value.
Shift from DMT to WMT: A Subtle but Significant Change
Another key adjustment is the shift in pricing units from US$/DMT (dry metric ton) to US$/WMT (wet metric ton). This change applies across multiple mineral commodities, including nickel, bauxite, cobalt, copper, and iron.
By factoring in moisture content, the new system reduces discrepancies in transaction values and closes potential loopholes in trade practices.
A New Era for Indonesia’s Mineral Pricing
The new regulation replaces the previous framework under Ministerial Decree No. 268/2025, which was considered too simplistic for today’s complex global market conditions.
The government is urging mining companies to quickly adapt, including strengthening coordination with surveyors to ensure compliance with the updated rules.
With this overhaul, Indonesia is not only tightening control over mineral pricing but also signaling the start of a new era—one defined by quality-based valuation, transparency, and efficiency.
For the industry, this is more than a regulatory update—it is a turning point that will determine which players can remain competitive in the evolving global mining landscape. (AT Network)
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