Energy Minister Warns SMEs Must Be Professional Operators to Hold Mining Permits
Jakarta — Energy and Mineral Resources Minister Bahlil Lahadalia has urged that micro, small and medium enterprises (MSMEs) granted mining management permits must be professional operators, in a bid to prevent the practice of pawning mining licences.
"We will only grant them to entrepreneurs who are already professional. They must not pawn their Mining Business Permits (IUP). This is a form of justice — how we realise the redistribution of our assets," Bahlil said at the National Entrepreneurship Day commemoration at the Smesco Building in South Jakarta on Tuesday (10 June 2025).
Bahlil explained that the MSMEs prioritised as IUP holders should not be those reliant on credit for their operations. He therefore asked MSME Minister Maman Abdurrahman to compile data on which MSMEs are eligible to receive mining permits.
"If it involves credit, that belongs in the cooperative segment — we must differentiate. Small operators may use credit, but those managing mines must not rely on credit," Bahlil explained.
Bahlil noted that Law Number 2 of 2025, the fourth amendment to Law Number 4 of 2009 on Mineral and Coal Mining, represents a commitment to ensuring mines are managed by all parties, including MSMEs and cooperatives. The government is continuing to draft implementing regulations for the law.
"On the instruction of President Prabowo, we amended the Mineral and Coal Mining Law. Previously, mining was controlled by only a handful of people, or only powerful individuals. Now that the law has been amended and finalised, on the President's directive, MSMEs and cooperatives are also entitled to own mines," Bahlil added.
Previously, whilst serving as Investment Minister and head of the Investment Coordinating Board (BKPM) under the administration of seventh President Joko Widodo, Bahlil had expressed frustration at the large number of mining permits being pawned to banks, describing the practice as absurd.
"This is absurd. Permits obtained from the state are then pawned at banks. Even my primary school child could do that," Bahlil said at the Investment Ministry building on Friday (12 August 2022).
Bahlil explained that mining permits must not be pawned to banks. Despite the prohibition, the practice remains widespread. Permits should be used by entrepreneurs to optimise production, yet many continue to pawn or even sell them.
"We will only grant them to entrepreneurs who are already professional. They must not pawn their Mining Business Permits (IUP). This is a form of justice — how we realise the redistribution of our assets," Bahlil said at the National Entrepreneurship Day commemoration at the Smesco Building in South Jakarta on Tuesday (10 June 2025).
Bahlil explained that the MSMEs prioritised as IUP holders should not be those reliant on credit for their operations. He therefore asked MSME Minister Maman Abdurrahman to compile data on which MSMEs are eligible to receive mining permits.
"If it involves credit, that belongs in the cooperative segment — we must differentiate. Small operators may use credit, but those managing mines must not rely on credit," Bahlil explained.
Bahlil noted that Law Number 2 of 2025, the fourth amendment to Law Number 4 of 2009 on Mineral and Coal Mining, represents a commitment to ensuring mines are managed by all parties, including MSMEs and cooperatives. The government is continuing to draft implementing regulations for the law.
"On the instruction of President Prabowo, we amended the Mineral and Coal Mining Law. Previously, mining was controlled by only a handful of people, or only powerful individuals. Now that the law has been amended and finalised, on the President's directive, MSMEs and cooperatives are also entitled to own mines," Bahlil added.
Previously, whilst serving as Investment Minister and head of the Investment Coordinating Board (BKPM) under the administration of seventh President Joko Widodo, Bahlil had expressed frustration at the large number of mining permits being pawned to banks, describing the practice as absurd.
"This is absurd. Permits obtained from the state are then pawned at banks. Even my primary school child could do that," Bahlil said at the Investment Ministry building on Friday (12 August 2022).
Bahlil explained that mining permits must not be pawned to banks. Despite the prohibition, the practice remains widespread. Permits should be used by entrepreneurs to optimise production, yet many continue to pawn or even sell them.