Mining 2026

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

integrated into their planning and execution process - es. Furthermore, the regulation designates the Head of Technical Mining as a key officer within mining com - panies. This individual is responsible for supervising the implementation of Good Mining Practice across all operational activities. The Head of Technical Mining must also ensure proper reporting and submit compli - ance reports to the MEMR. 3.4 Energy-Transition Minerals Currently, Indonesian mining regulations do not impose restrictions that specifically target critical minerals, including energy-transition minerals such as lithium, cobalt, rare earth elements and copper. Instead of creating mineral-specific limitations, the government has adopted a broader policy that applies to all minerals. To preserve mineral resources and pro - mote value addition, these regulations require mining companies to construct or collaborate with domestic smelters and prohibit the export of certain raw miner - als unless processing obligations are fulfilled. Ban on Nickel Ore Export and Extension to Other Minerals In MEMR Regulation No. 11 of 2019 on the Second Amendment to MEMR Regulation No. 25 of 2018 on Mineral and Coal Mining Businesses, Indonesia established a full export ban on nickel ores and con - centrates. The government justifies its nickel export halt and processing mandate with three reasons: (i) leveraging nickel’s immediate economic value in terms of Gross Domestic Product, revenue, employ - ment and regional development; (ii) strengthening its downstream steel industry to reduce import depend - ence; and (iii) securing critical supply for its strategic expansion in the EV battery market. Following the per - ceived success with nickel, Indonesia later extended the export ban to other critical minerals such as: • washed bauxite through MEMR Regulation No. 17 of 2020 on the Third Amendment to MEMR Regu - lation No. 25 of 2018 on Mineral and Coal Mining Businesses; and • raw copper, iron, lead, or zinc concentrate through MEMR Regulation No. 6 of 2024, as amended.

Accordingly, the prohibition on the export of various mineral ores is reaffirmed under Minister of Trade Regulation No. 22 of 2023 on Goods Prohibited from Export, as amended. Moratorium on the Issuance of Smelter Business Permits Indonesia has officially restricted the issuance of permits for nickel refining plants (smelters) as gov - erned in Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licens - ing (“GR 28/2025”). The regulation requires business entities to commit to full downstream processing and value-added production, which includes refined nickel and EV battery materials. This restriction is designed to attract long-term investment into high-value, ESG- compliant production, with the aim of becoming a key hub in the global EV supply chain. Rare Earth Metal Commodity Mining “Rare earths” refers to minerals with limited occur - rence that possess unique and essential properties for various modern technological applications. Areas identified by the Geological Agency ( Badan Geologi ) through investigation and research as potentially con - taining rare earth metal commodities will be invento - ried for designation as mining business permit areas. The MEMR will then appoint SOE(s) to carry out the exploitation and utilisation of those rare earth metal commodities, prioritising the development of domes - tic priority industries. 4. Taxation of Mining and Exploration 4.1 Mining and Exploration Duties, Royalties and Taxes There are two applicable main non-tax payments for mining activities in Indonesia, namely: • dead rent ( iuran tetap ), a fixed annual payment that mining permit holders must pay to the Indonesian government for the right to use a mining area, regardless of whether production occurs; and • royalties, payments calculated as a percentage of the sale value of minerals or coal produced. They represent the government’s share of resource extraction.

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