Gross Split Cancelled for Minerals and Coal, IMA: Investment Certainty Maintained
The Indonesian Mining Association (IMA) has welcomed the government’s decision to cancel the plan to implement a gross split scheme, similar to the oil and gas sector, within the minerals and coal (minerba) industry. This step is considered vital for maintaining investment certainty and business climate stability in the national mining sector.
IMA Executive Director Sari Esayanti stated that the characteristics of the minerals and coal industry differ significantly from the oil and gas sector, meaning the application of the same scheme could potentially create uncertainty for businesses.
“The minerals and coal mining industry has unique characteristics with varying levels of complexity for each commodity. These fundamental differences are why many countries apply royalty and fiscal systems that differ from the oil and gas sector,” said Sari on Monday.
According to her, the government’s decision to maintain the current system provides a positive signal to investors who require regulatory certainty to conduct long-term business activities. IMA hopes the government will continue to maintain consistency in fiscal policy and corporate financial obligations to ensure that investment sustainability and mining sector operations can run optimally.
This consistency is deemed increasingly important as the mining industry currently faces various regulatory adjustments, ranging from the implementation of single-door exports, Export Proceeds (DHE) obligations, adjustments to royalties and Mineral Reference Prices (HPM), the application of export duties, to the planned B50 biodiesel mandate.
Sari emphasised that policy certainty and consistency are the primary factors in maintaining the competitiveness of Indonesia’s mining industry amidst intensifying global competition. “This is crucial, especially to support the long-term investment needs required for the national downstreaming and energy transition agendas,” she added.
According to the IMA, cancelling the proposed gross split scheme for the minerals and coal sector is the right move, as it provides certainty for businesses while maintaining the investment momentum needed to strengthen the national mining industry.