Government Reviews Changes to Mining Contract Schemes, Will It Follow the Oil and Gas Model?

The Ministry of Energy and Mineral Resources (ESDM) is currently reviewing the implementation of a profit-sharing scheme in the upstream oil and gas (migas) industry for the mineral and coal mining (minerba) sector.

Director General of Mineral and Coal (Dirjen Minerba) at the Ministry of ESDM, Tri Winarno, stated that his side is conducting a study on the discourse of changing the contract scheme in the mining sector.

However, he admitted that this cannot yet be elaborated further as it is still in the internal review process.

“It’s under review; how can it be announced while still under review? It’ll become popular later,” he said when met at the Ministry of ESDM office in Jakarta on Wednesday (6/5/2026).

The government emphasised that details regarding the profit-sharing mechanism have not yet reached the final stage. They are striving to ensure that every regulatory change still provides legal certainty and investment attractiveness for mining contractors.

“Not yet. Not yet. Still under (review),” Tri continued.

In addition, the government is also evaluating taxation aspects to ensure the minerba sector’s contribution to state revenues.

Previously, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia revealed that the government is reviewing the implementation of a profit-sharing scheme like that in the upstream oil and gas (migas) industry to also apply to the mineral and coal mining (minerba) industry.

He conveyed this after meeting with President Prabowo Subianto in a limited meeting at the State Palace on Tuesday (5/4/2026).

In that meeting, one of the main focuses of discussion was the restructuring of the national mining sector.

“We discussed the future arrangement of mining that should be mostly owned by the state. And that relates to the implementation of Article 33 (of the 1945 Constitution),” Bahlil revealed at the State Palace on Tuesday (5/5/2026).

According to Bahlil, the government wants to ensure that the management of natural resources, both old and new mines, can provide maximum contribution to state revenues.

At least, one of the options being reviewed is adopting a cooperation pattern like that applied in the upstream migas sector for mining.

It should be noted that in the upstream migas world, there are two cooperation contract schemes: the Production Sharing Contract (PSC) with Cost Recovery and PSC Gross Split.

Both types of contracts are forms of cooperation between the government through the Special Task Force for the Implementation of Upstream Oil and Gas Business Activities (SKK Migas) and investors.