As Mines Face Cost Pressures and Layoffs, Government Changes Strategy
JAKARTA, KOMPAS.com – The national mining industry is facing multilayered pressures, from rising operational costs to the threat of layoffs. Amid these conditions, the government has chosen to change its strategy by controlling production and organising business permits to maintain stability in the sector.
The pressures on the industry are not only coming from within the country but also from global dynamics. The increase in fuel oil prices and plans to implement B50 biodiesel are further increasing the production cost burden for mining companies.
At the same time, changes to the Work Plan and Budget (RKAB) policy to an annual basis, along with controls on mineral and coal production, add challenges for business players. This situation is pushing companies to carry out efficiencies, including workforce adjustments.
Chairman of the Indonesian Mining Experts Association (Perhapi) Sudirman Widhy Hartono assessed that the combination of these policies is putting significant pressure on the industry, especially at the beginning of the year when the RKAB approval process is not yet complete.
“There are many companies that cannot function at the beginning of the year due to delays in the RKAB approval process,” said Widhy during the “Discussion on the Role of RKAB and Production Increases in Strategies to Address Global Challenges”, Wednesday (8/4/2026).
“Alhamdulillah, there is a kind of relaxation to use 25 percent of the activities that are still valid,” he said.
Amid this uncertainty, several coal companies have begun operational adjustments, including reducing production activities as a precautionary measure against plans to control output.
In addition, the implementation of B50 is also a concern because it has the potential to increase production costs. Experience with the use of B20 to B40 has shown a decrease in equipment performance and an increase in maintenance costs, especially in remote areas.
Although the government claims that the B50 policy can save diesel subsidies of up to Rp 48 trillion, industry players are asking for its implementation to be carried out carefully to avoid wider impacts.
Secretary of the Directorate General of Minerals and Coal of the Ministry of Energy and Mineral Resources Siti Sumilah Rita Susilawati said that this sector is now in an unstable global landscape due to geopolitical conflicts and competition for critical minerals.
“We know that we are currently in a world whose rhythm we no longer know and is unclear. What is clear is that it is unstable,” said Rita during a discussion in Jakarta, Thursday (10/4/2026).
She added that this condition makes critical minerals a strategic commodity contested by many countries. “We are in a situation where critical minerals are very important, everyone is competing for them,” she said.
“The government is carrying out production adjustments, not restrictions, but more towards control,” said Rita.
According to her, increasing production volume does not always align with state revenues. “When we produce a lot in volume, it is not proportional to the state income that we can generate,” she said.
In addition, changing the RKAB scheme to annual aims to make supply control more flexible, while ensuring that the domestic market obligation (DMO) is still fulfilled. “For the domestic market obligation, we all must comply. We must fulfil it, that way we can survive,” Rita emphasised.