Indonesia to Implement Market-Adjusted Gold DMO Pricing

Shift from Fixed Pricing Model

Indonesia is set to introduce a more flexible pricing mechanism for its gold Domestic Market Obligation (DMO) starting in 2026, marking a departure from the fixed price model currently used for coal DMO. According to Yuliot Tanjung, Vice Minister of Energy and Mineral Resources, the gold DMO price will be adjusted according to market prices, rather than being fixed at a specific value.

Key Differences from Coal DMO

The decision to implement a market-adjusted pricing for gold DMO contrasts with the coal DMO, which is currently priced at US$ 70 per ton. Yuliot emphasized that gold pricing needs to be more dynamic, stating, "If there's a discount price, we'll take it too." This approach suggests that the government is looking to make the gold DMO more responsive to market conditions.

Export Duty Implementation

This policy shift comes as Indonesia prepares to introduce a 15% export duty on gold in 2026. The government is still finalizing the details of the gold DMO as the new export duty comes into effect. The combination of these policies is expected to have significant implications for Indonesia's gold mining industry and its contribution to the national economy.

Implications for Gold Mining Sector

The new pricing mechanism and export duty are likely to affect gold producers operating in Indonesia. While the market-adjusted pricing may provide more flexibility, the additional export duty could increase the cost of doing business for these companies. The final details of the DMO and how it interacts with the export duty will be crucial in determining the overall impact on the industry.