Migas Profit-Sharing Scheme to be Applied to Mining, IMA Warns of This

The Indonesian Mining Association (API-IMA) has spoken out regarding the Energy and Mineral Resources Minister Bahlil Lahadalia’s plan to apply the oil and gas (migas) profit-sharing scheme to the mining sector. Fundamentally, 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. API-IMA Executive Director 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 mechanism in the minerba sector unable to be equated with the migas sector. “The minerba mining industry has unique characteristics with different levels of complexity for each commodity. This fundamental difference is why many countries apply royalty and fiscal systems that differ from the migas sector,” said Sari in a written statement on Friday (8/5/2026). IMA assesses that the application of a profit-sharing scheme like the production sharing contract (PSC) in the migas sector will 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 DHE, royalties, HPM, export duties, and the implementation of B50, which add to the operational challenges for mining companies,” added Sari. IMA believes that policy certainty and consistency are key factors in maintaining the competitiveness of Indonesia’s mining industry, especially amid global dynamics and the increasing need for long-term investments to support national downstreaming and energy transition.