Indonesia Shifts Mining Policy to Safeguard Commodity Value
Indonesia Shifts Mining Policy to Safeguard Commodity Value
10 Apr 2026 22:05 WIB
Voice of Indonesia
Key Points
Indonesia shifts mining policy to prioritize price stability and commodity value over sheer production volume.
The sector faces supply chain challenges, including sulfur shortages and reliance on foreign technology.
RRI.CO.ID, Jakarta - The government is shifting its approach to managing the mineral and coal sectors. Instead of prioritizing production volume, the focus will now be on maintaining price stability and commodity value in the global market.
The Ministry of Energy and Mineral Resources (ESDM) emphasized that the 2026 production control policy is designed to prevent oversupply, which could depress commodity prices.
The Ministry’s Directorate General of Mineral and Coal Secretary Siti Sumilah Rita Susilawati said global conditions remain unstable and unpredictable. “We are living in a world whose rhythm is no longer clear or predictable. What is clear is that it is unstable,” Rita said in Jakarta on Friday, April 10, 2026, as quoted by Antara.
She explained that large-scale production increases do not always translate into higher state revenue. In fact, oversupply often drives down prices and harms the industry. The government is therefore adopting a value-over-volume approach, prioritizing economic value over sheer output.
To implement this, the government is controlling mineral and coal production through the Work Plan and Budget (RKAB) policy. “The government is adjusting production, not restricting it. This gives us flexibility to respond to global market conditions,” Rita said.
She added that meeting domestic demand through the Domestic Market Obligation (DMO) remains the top priority before exports.
The mining industry also faces challenges ranging from global supply chain uncertainty to limited availability of supporting raw materials.
Deputy chairman of communications at the Indonesian Mining Association (IMA), Bernadus Irmanto, highlighted the shortage of raw materials such as sulfur, which is vital for nickel processing. He noted that the challenge lies not only in price but also in availability.
The nickel industry also faces sustainability issues due to its heavy reliance on fuel oil, including marine fuel oil (MFO) and diesel.
To address this, PT Vale has begun exploring environmentally friendly technologies, such as electrifying mining vehicles, though implementation remains challenging for productivity.
Bernadus stressed that downstreaming remains the industry’s main focus. However, downstreaming requires investment and technology, much of which still comes from abroad, particularly China. This reliance adds complexity to the geopolitical risks facing the development of Indonesia’s nickel industry.
He emphasized the importance of ensuring secure nickel supplies for investors, especially for projects scheduled to begin operations in the third quarter of 2026. ***
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