IMA deems cancellation of production sharing scheme for mining sector appropriate

Jakarta (ANTARA) - The Indonesian Mining Association (IMA) has assessed the government’s decision to cancel the planned implementation of an oil and gas production sharing scheme for the mineral and coal mining sector as highly appropriate and crucial. “The mineral and coal mining industry possesses unique characteristics with varying degrees 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 IMA Executive Director Sari Esayanti in an official statement confirmed by ANTARA from Jakarta on Tuesday. According to her, the government’s decision is crucial for eliminating problems and proposals that could disrupt investment. Through the cancellation of this scheme, Sari hopes the government can realise stable fiscal policy and corporate financial obligations so that the sustainability of investment and mining industry operations can proceed smoothly. This stability is urgently needed considering the mining industry is currently facing various policy adjustments and new operational challenges, including the implementation of single-window export regulations, export proceeds regulations, adjustments to royalties and the Mineral Benchmark Price, export duties, and the obligation to implement B50 biodiesel. IMA emphasised that certainty and consistency in government policy are the primary keys to maintaining the competitiveness of Indonesia’s mining industry. “This is particularly important amidst the increasing need for long-term investment to support the national downstreaming agenda and energy transition,” said Sari. Minister of Energy and Mineral Resources Bahlil Lahadalia confirmed there will be no change to the production sharing scheme for the mineral and coal mining sector. “In the mineral and coal sector, there is absolutely no change. It is important for me to convey this to provide confirmation that the existing rules remain unchanged. Forever,” said Bahlil at a press conference at the Senayan Parliament Complex, Jakarta, on Monday. Bahlil decided that the gross split scheme applies only to the oil and gas sector and will not apply to the mineral and coal sector. This stipulation, Bahlil stated, is permanent. “The doctrine in the Ministry of Energy and Mineral Resources adheres to the principle that gross split only exists in the oil and gas sector,” said Bahlil.