Nickel Mines scores a big tax break for Indonesian stainless steel project
Mining & Resources
Nickel Mines’ Indonesian partner will not have to pay income tax for the first seven years of operation of its stainless steel project.
The corporate income tax relief for the RKEF Project — currently under construction in Indonesia’s Morowali Industrial Park – saw the Nickel Mines (ASX:NIC) share price jump over 9 per cent before settling at 28c.
Nickel Mines holds 60 per cent of the project.
The ruling means Indonesian operator PT Hengjaya Nickel will pay no corporate income tax for the first seven years of production, and then only 50 per cent for the following two years.
Morowali Industrial Park is the world’s largest vertically integrated stainless steel hub, with production capacity ramping up to 3 million tonnes per annum.
“Upon commencing commercial production, we will obviously be extremely pleased to benefit from these taxation concessions,” Nickel Mines told investors.
“Application of these corporate income tax exemptions will clearly have a materially positive impact on the project’s already impressive economic returns.”
In August, Nickel Mines became the biggest Australian resources listing since April’s Jupiter Mines float, raising $200m selling shares at 35c each.
But it didn’t get off to a great start with its share price closing on its first day at 28c – a 20 per cent discount to its IPO price.