IMA Asserts that Upstream Oil and Gas Scheme Cannot Be Copied to the Minerba Industry
JAKARTA, investortrust.id — The Indonesian Mining Association (API-IMA) views that the mineral and coal mining (minerba) industry has very different business characteristics compared to the oil and gas (migas) industry, both in terms of business models, investment patterns, risk levels, regulations, and permitting mechanisms.
Executive Director of API-IMA, Sari Esayanti, explained that the minerba mining industry has a high level of complexity with varying characteristics for each commodity. This condition makes the fiscal policy approach and state revenue mechanisms in the minerba sector unable to be equated with the migas sector.
“The fundamental differences are why many countries apply different royalty and fiscal systems from the migas sector,” said Sari on Friday (8/5/2026).
IMA assesses that the application of profit-sharing schemes, such as the production sharing contract (PSC) in the migas sector, would face significant challenges if implemented in the minerba mining sector. This is due to the fundamental differences in business cycles, risk profiles, cost structures, and operational mechanisms between the two sectors.
Furthermore, IMA emphasises the importance of policy stability, particularly regarding companies’ financial obligations, to maintain the sustainability of investments and operations in the national mining industry.
“We hope for stability in financial obligations so that the investment climate remains conducive and mining operations can proceed sustainably. Currently, the industry faces various policy adjustments, such as changes to export proceeds (DHE), royalties, benchmark mineral prices (HPM), export duties, and the implementation of B50, which add to the operational challenges for mining companies,” said Sari.
IMA believes that policy certainty and consistency are key factors in maintaining the competitiveness of the Indonesian mining industry, especially amid global dynamics and the increasing need for long-term investments to support national downstreaming and energy transition.