The Ministry of Energy and Mineral Resources (ESDM) has officially\nrestricted holders of Mining Business Licences (IUP) from using their\nown subsidiaries or affiliated companies to execute mining projects.\nThis move is intended to prevent operational monopolies and promote the\ninvolvement of regional entrepreneurs.<\/p>\n
These provisions are set out in the Decree of the Minister of ESDM\nNumber 3criptor365.K\/MB.01\/MEM.B\/2026 regarding Technical Guidelines for\nthe Implementation of Approval for the Use of Subsidiaries and\/or\nAffiliates in the Mineral and Coal Mining Services Business. The\nregulation, signed by Minister of ESDM Bahlil Lahadalia, mandates that\nall mining permit holders must not arbitrarily use their own\nsubsidiaries or affiliates without prioritising local contractors.<\/p>\n
\u201cHolders of Mining Business Licences or Special Mining Business\nLicences who use mining services in their business activities must use\ncompanies holding Mining Service Business Licences, with provisions that\nprioritise mining service companies within the regency\/city areas\nsurrounding the Mining Business Licence Area or Special Mining Business\nLicence Area,\u201d stated the first clause of the regulation, as reported on\nWednesday (30\/09\/2026).<\/p>\n
The new regulation, established on 18 September 2026, limits the\npractice of monopolising mining service work by the business groups\nholding the mining licences. The government prohibits the involvement of\nsubsidiaries or affiliates in the mineral and coal mining services\nsector, whether through direct share ownership or shared ultimate\nbeneficial owners.<\/p>\n
\u201cHolders of Mining Business Licences or Special Mining Business\nLicences are prohibited from involving subsidiaries and\/or affiliates in\nthe mineral and coal mining services business without the Minister\u2019s\napproval,\u201d stated the second clause of the regulation.<\/p>\n
Nevertheless, the government maintains an exception for the use of\nsubsidiaries or affiliates through special approval from the Minister of\nESDM for national strategic projects. Such exceptions may be granted if\nmining companies are undertaking government assignments, such as\nnational strategic projects, the construction of refining facilities or\nsmelters, and meeting domestic mineral and coal requirements.<\/p>\n
The application process for the approval to use subsidiaries will be\nevaluated by the Ministry of ESDCO, with a decision timeframe of no more\nthan 14 working days.<\/p>\n
Director General of Mineral and Coal at the Ministry of ESDM, Tri\nWinarno, explained that the regulation essentially prohibits licence\nholders from managing all business activities independently through\ntheir subsidiaries. However, he noted that the government provides\nspecific exceptions for projects meeting certain strategic criteria.<\/p>\n
\u201cThe regulation does not permit affiliates, but the Ministerial\nDecree allows for affiliates under certain conditions,\u201d Tri said. He\nadded that criteria include meeting domestic needs, involvement in\nNational Strategic Projects (PSN), and supporting downstreaming\nprogrammes.<\/p>\n
The Indonesian Coal Mining Association (APBI) has responded to the\nnew regulation regarding the requirement to use local contractors.\nExecutive Director of APBI, Gita Mahyarani, stated that the association\nis still studying the new regulation and cannot comment extensively at\nthis stage.<\/p>\n
However, industry players are highlighting concerns regarding the\nimplementation of this policy on the ground. She noted that appointing\nmining contractors involves complex aspects that do not solely focus on\nlocal status or corporate affiliation.<\/p>\n
\u201cWe are still studying it. The concern is how this rule will be\napplied in the field,\u201d she told CNBC Indonesia on Tuesday (29\/09\/2026).\nGita explained that in mining operations, selecting contractor partners\nrequires very strict and proven qualifications. Decisions must consider\ntechnical readiness, safety, equipment availability, financial capacity,\nproductivity, and governance, risk, and compliance (GRC).<\/p>\n
The issuance of this new policy is expected to provide regulatory\nclarity while maintaining the safety standards and technical\ncapabilities of the national mining industry.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/miners-prohibited-from-using-mining-services-from-subsidiaries-or-affiliates-1790758374", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }