Jakarta. Indonesia has postponed its royalty hike on mining commodities amid concerns over the policy potentially taking a toll on business  profits.

Energy Minister Bahlil Lahadalia said Monday that the government would put the plan on hold after “listening to inputs from businesses”. The resource-rich country initially wants to capture more revenue potential by raising the royalties, with tin -- a key component in smartphones -- seeing the steepest hike. This policy was supposed to enter into force in June.

“So the royalty hike is now on pending so we can create a good formulation, one that is mutually beneficial,” Bahlil told the press in Jakarta, as reported by the state news agency Antara.

Bahlil went on to say that the new formulation will not place a burden on businesses, while also being able to boost the state revenue. The plan had previously fueled market concerns, as it was feared to slash miners' margins.

On Monday morning, the Jakarta Composite Index (JCI) weakened by 9.46 points, or down 0.14%, to 6,959.94. Indo Premier Sekuritas equity analyst Hari Rachmansyah attributed the decline to the mining royalty hike.

According to the proposed plan, the government will raise the royalty for tins to be capped at 20%, higher than the previous limit of 10%. The 20% is planned to take effect if the reference price tops $50,000 per ton. Shares for state tin miner Timah (IDX: TINS) rose 4.3% to Rp 3,640 on Monday afternoon, following Bahlil’s announcement.