Mining 2026

INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Mahatma Hadhi, Kenny Poltak and Atika Rizka, ABNR Counsellors at Law

1. Mining Law: General Framework 1.1 Main Features of the Mining Industry The Indonesian mining industry plays a vital role in contributing to the revenue of the State of the Repub - lic of Indonesia. In 2024, income from mineral and coal mining was reported at approximately IDR107,775 bil - lion. This figure has shown a significant and consistent increase over the past five years, reflecting the sec - tor’s strong growth trajectory. The industry has not only expanded at the upstream level but has also made remarkable progress in down - stream activities. In recent years, Indonesia has suc - cessfully transitioned towards mineral ore processing, driven by the rising global demand for nickel-based electric vehicle (EV) batteries and the sharp increase in demand for certain metallic commodities such as gold and copper. Several high-pressure acid leaching facilities and alu - minium processing plants are expected to become fully operational in 2026. These developments are creating substantial contributions to local economic growth, infrastructure development and job creation, reinforcing Indonesia’s position as a key player in the global mining and mineral processing industry. 1.2 Legal System and Sources of Mining Law Indonesia’s adoption of a civil rather than common law system can be traced back to its introduction by the Dutch during colonisation, and the Dutch codification of legislation in Indonesia is still in effect today. Civil law in Indonesia is hierarchical, in which lower-level regulations are primarily guidance on implementation, in conformity with higher-level regulations. The main sources of mining legislation are the follow - ing: • Law No. 4 of 2009 on Coal and Mineral Mining, as amended (the “Mining Law”): This law serves as the primary legal basis governing all aspects of mineral and coal mining in Indonesia, including management, licensing, share divestment require - ments, supervision and sanctions. • Government Regulation No. 96 of 2021 on the Implementation of Mineral and Coal Mining Busi -

ness Activities, as amended (“GR 96/2021”): This regulation sets out the technical implementation of mineral and coal mining activities, including licens - ing procedures, further elaboration on the share divestment requirements, reporting obligations and supervision. • Law No. 6 of 2023 on the Stipulation of Law No. 2 of 2022 on Job Creation into Law (the “Job Crea - tion Law”): This regulation is an omnibus law that amends and harmonises various provisions in the mining sector, including those on licensing, govern - ance and investment. 1.3 Ownership of Mineral Resources Under Indonesian law, surface rights are distinct from the rights to conduct mining activities granted under a mining licence. Land title does not confer the right to mine or ownership of mineral commodities located underground. Conversely, a mining licence grants the right to conduct mining activities but does not provide ownership of the land itself. As a result, it is common practice for mining companies to enter into agree - ments with land title holders to secure surface rights for mining operations. With respect to the ownership of the mining prod - ucts, mineral resources are owned by the State and not by landowners or any administrative division of the State. Pursuant to Article 33 (3) of the Constitu - tion of the Republic of Indonesia, land, water and the natural resources contained therein are controlled by the State and utilised for the greatest benefit of the people. This emphasises that the mining products are controlled by the State. Article 92 of the Mining Law, as amended, reinforces this principle that the holder of mining rights shall only be entitled to the miner - als and coal produced from the mine after fulfilling the payment of production royalties. The payment of royalties shall be made at the point of sale. In this sense, mining rights grant the authority to explore and exploit resources, but not proprietary ownership of those resources in situ. The State retains ultimate control until extraction and royalty settlement. This system ensures that resource exploitation aligns with national interests and contributes to public welfare.

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