Following Prabowo's Directive, Bahlil Asserts No Permanent Changes to Mining Regimes
Jakarta, CNBC Indonesia - The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has emphasised that the agreement or licensing schemes within the mineral and coal mining (minerba) sector will not undergo any changes indefinitely. He asserted that this stance is in accordance with the directives from President Prabowo Subianto.
Bahlil clarified that the revenue-sharing scheme based on gross income, known as Gross Split, applies exclusively to the upstream oil and gas sector. This specific contract scheme will not be extended to the mineral and coal mining sector. These remarks were made following a 1.5-hour meeting with the Deputy Speaker of the House of Representatives, Sufmi Dasco Ahmad, and the COO of Danantara, Dony Oskaria, at the DPR RI Building on Monday morning.
“Today, we held a lengthy discussion of almost 1.5 hours on how to formulate a policy that provides certainty to business actors, particularly in the mining sector,” he stated during a press conference following the meeting. “First, the system within the Ministry of Energy and Mineral Resources that adopts the Gross Split school of thought applies only to the oil and gas sector. I repeat, based on regulations and the President’s directives, Gross Split is only for the oil and gas sector. Meanwhile, in the mineral and coal sector, there will be no changes at all. It is important that I convey this to provide affirmation that existing regulations will remain unchanged indefinitely; it is my duty to maintain that.”
It is noted that the Ministry of Energy and Mineral Resources had previously been reviewing changes to agreement or profit-sharing schemes in the mining industry. This included examining the application of upstream oil and gas contract models, such as Cost Recovery or Gross Split, to the mineral and coal mining sector. There had been circulating rumours regarding a plan to implement a Gross Split scheme in the mining industry with a profit-sharing percentage of 70% for the state and 30% for companies. This discourse on changing profit-sharing agreements was previously intended to explore ways to increase state revenue from the mineral and coal mining sector.