Behind the Controversy: Nickel Export Halt Caused by Rare Earth Element Content
A number of business players in the domestic mining and mineral processing sectors have collectively requested that the government permit the re-export of mineral products that have undergone domestic processing and downstreaming. This follows a situation occurring over the past week where at least 120 mineral product transport ships from Indonesian ports have been unable to sail. Despite businesses having completed the downstreaming process, the following factors have triggered the controversy:
The Ministry of Trade issued Ministerial Regulation (Permendag) No. 6 of 202/6, which amends Regulation No. 22 of 2023 regarding goods prohibited for export. Effective from 1 April 2026, this regulation prohibits the export of Rare Earth Elements (REE) containing 17 specific elements (such as Scandium, Yttrium, and Neodymium) at concentrations of less than 99%.
On 8 July 2026, the Attorney General’s Office named three suspects in a corruption case involving the management of non-metallic mineral mining by PT Putraprima Mineral Mandiri (PT PMM) between 2018 and 2026. The suspects include a representative from PT PMM, a Head of Service Unit from PT Sucofindo, and a Head of Customs Office in Pangkalpinang. The Attorney General’s Office alleges that the suspects conspired to manipulate laboratory test results to hide the presence of strategic REE content, thereby facilitating the issuance of export documents. Consequently, surveyors are now hesitant to issue survey reports, leaving at least 120 survey reports for commodities such as nickel and tin pending.
Government Response:
In response to the disruption of mineral exports, the government held a cross-ministerial coordination meeting led by the Chief of Staff to the President, Dudung Abdurachman, on 27 July 2026. The meeting included representatives from the Coordinating Ministry for Economic Affairs, Ministry of Finance, Ministry of Energy and Mineral Resources, Ministry of Industry, Ministry of Trade, Attorney General’s Office, and the National Police Criminal Investigation Agency (Bareskrim), among others.
Mr Abdurachman noted that the primary issue is the absence of regulations specifying the maximum allowable limit for REE as a byproduct in export commodities. This regulatory vacuum has caused uncertainty and fear among businesses. He emphasised that law enforcement agencies must not obstruct export activities provided businesses comply with existing laws. The Office of the President is currently coordinating the drafting of a temporary guideline to establish maximum REE thresholds, developed alongside technical ministries, law enforcement, and industry stakeholders, to ensure exports can resume without harming the broader economy.