Entrepreneurs Cry Out as Rare Earth Element Regulations Hamper Nickel Industry
The Indonesian government has prohibited the export of 18 types of Rare Earth Elements (REE) and their compounds with purity levels below 99%, a policy regulated under Ministerial Regulation (Permendag) No. 6 of 2026.
The Chairman of the Indonesian Nickel Industry Forum (FINI), Arif Perdanakusumah, stated that due to this regulation, at least 120 commodity ships are unable to sail or depart from ports because of the mandatory requirement for REE content testing. “This is very detrimental because there is no regulation providing guidelines on REE limits. The losses are incurred not only by entrepreneurs but also by the government,” he explained during a CNBC Indonesia Coffee Morning on Thursday (20/7/2026).
According to Arif, the REE regulations remain confusing. He noted that the nickel industry is already under pressure from geopolitical conditions and overlapping policies. “From Middle Eastern geopolitics, we are being profoundly impacted. The geopolitics occurring there directly affects industrial production costs. Rising energy costs are reflected in the sharp increase in oil and coal prices, alongside disrupted logistics routes. Consequently, industries that still rely on imported raw materials are being disrupted,” he asserted.
Furthermore, domestic entrepreneurs are facing pressure from changes in royalty taxes and challenging Work Plan and Budget (RKAB) processes, where industrial needs cannot be met by current production, leading to high nickel ore prices.
In response, the Chairman of Commission XII of the Indonesian House of Representatives (DPR RI), Bambang Patijaya, has called for the government, law enforcement, and all stakeholders to convene immediately. This is specifically to resolve the polemic regarding the stalled exports of several mineral products, such as Nickel Pig Iron (NPI), due to REE management issues. He noted that the current problem is not merely about law enforcement but is triggered by the absence of clear regulations regarding the governance and threshold levels of REE content in mineral commodities.
Bambang also assessed that the situation is exacerbated by conflicts between business actors, where mutual reporting of activities has led to law enforcement actions in several regions, such as the recent incidents in the Riau Islands.
He emphasised that the government cannot resolve issues solely through export bans without considering the resulting economic impact. He stressed the need for a unified perception across ministries, agencies, and law enforcement to ensure policies do not hinder industrial activity.
Previously, the Chief of Staff to the President (KSP), Dudung Abdurachman, addressed the disruption of mineral exports containing REE as by-products. He stated that the KSP had received reports from several entrepreneurs regarding the disruption of mineral export activities. Dudung revealed that a primary cause of the bottleneck is the lack of regulations governing the maximum allowable REE content as a by-product in export commodities. This regulatory vacuum has led to differing interpretations between business actors and law enforcement. He asserted that until regulations governing REE content are established, law enforcement agencies must not create their own interpretations that result in the disruption of export activities.