INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Mahatma Hadhi, Kenny Poltak and Atika Rizka, ABNR Counsellors at Law
6. Mining: Outlook and Trends 6.1 Two-Year Forecast for the Mining Sector In recent years, investment trends in Indonesia’s min - ing sector have shifted towards downstream mineral processing and integrated upstream-downstream projects. This shift has been driven primarily by two factors: (i) the Indonesian government’s strict regula - tions on the export of unprocessed mineral ore (com - monly referred to as the mineral ore export ban); and (ii) the growing demand for certain mineral products that support emerging industries, such as EV battery manufacturing. Accordingly, foreign investors entering the mineral mining sector in Indonesia must allocate capital not only to exploration and extraction but also to the development of domestic processing and refin - ing facilities.
In addition, recently, the government issued a new policy on mixed hydroxide precipitate (MHP) produc - tion restriction under GR 28/2025. GR 28/2025 intro - duces a moratorium on issuing new Industrial Busi - ness Licences (IUIs) for companies under KBLI 24202 that produce intermediate products of nickel process - ing industries (eg, MHP), effectively restricting new nickel smelting operations. This new policy appears to aim to stabilise nickel ore prices amid oversupply and encourage the production of higher-value intermedi - ate products (eg, nickel sulphate) rather than stopping at MHP. This signals a broader trend towards value- added manufacturing within Indonesia, aligning with the government’s long-term industrial strategy. Future policies may include domestic market obligations and incentives to support the production of end products, particularly for EV battery components. Indonesia’s mining sector is expected to play a pivotal role in the global energy transition and climate change mitigation. Future trends may include: • increased investment in critical minerals (nickel, cobalt, bauxite) for EV batteries and renewable energy technologies; and • potential legislative changes introducing stricter environmental standards, sustainability reporting obligations, and incentives for green technologies in mining.
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