Note! These Miners Are Still Allowed to Use Subsidiary or Affiliate Mining Services
Jakarta, CNBC Indonesia - The Ministry of Energy and Mineral Resources (ESDM) prohibits companies holding Mining Business Licences (IUP) within the country from using their own subsidiaries or affiliates without prioritising local contractors. This step is intended to encourage economic growth in the regions surrounding mining areas.
This policy is set out in the Decree of the Minister of ESDM Number 3MX.K/MB.01/MEM.B/2026 regarding Technical Guidelines for the Implementation of Approval for the Use of Subsidiaries and/or Affiliates in the Mineral and Coal Mining Services Business.
Nevertheless, there are exceptions for mining companies carrying out special assignments from the government. The involvement of subsidiaries or affiliates is only permitted if they meet the assignment criteria and have obtained official permission from the Minister of ESDM.
“The exception for the use of subsidiaries and/or affiliates in the mineral and coal mining services business through approval as referred to in the SECOND Dictum can only be granted to holders of Mining Business Licences or holders of Special Mining Business Licences who are currently carrying out assignments by the Government,” stated the FOURTH Dictum of the regulation, as quoted on Wednesday (30/09/2026).
Government assignments that serve as the prerequisite for such exceptions include three main categories of national strategic activities. These categories include the implementation of national strategic projects, the construction of mineral processing and refining facilities or coal development, and the fulfilment of mineral and coal commodities for domestic needs.
Before obtaining an exception, mining companies are prohibited from involving subsidiaries or affiliates arbitrarily to prevent monopoly practices. This prohibition applies to direct share ownership or the presence of the same beneficial owner between the mining company and the mining services company.
For mining companies that meet the criteria for government assignments, applications for approval to use subsidiaries must be submitted directly to the Minister of ESDM. The Ministry of ESDM will process and provide an approval decision within a maximum period of 14 working days from the receipt of the documents.
The regulation, established in Jakarta on 18 September 2026, simultaneously revokes the Regulation of the Director General of Minerals, Coal, and Geothermal Number 376.K/30/DJB/2010.
The full contents of the regulation are as follows:
FIRST:
Holders of Mining Business Licences or Special Mining Business Licences using mining services in their business activities must use companies holding Mining Service Business Licences, with provisions to prioritise mining service companies within the regency/city areas surrounding the Mining Business Licence Area or Special Mining Business Licence Area.
SECOND:
Holders of Mining Business Licates or Special Mining Business Licences are prohibited from involving subsidiaries and/or affiliates in the mineral and coal mining services business without the Minister’s approval.
THIRD:
The prohibition of involving companies and/or affiliates in the mineral and coal mining services business as referred to in the SECOND Dictum includes:
direct share ownership by the holder of a Mining Business Licence or Special Mining Business Licence in the holder of a Mining Service Business Licence; or
the identity of one or more beneficial owners of the holder of a Mining Business Licence or Special Mining Business Licence with the holder of a Mining Service Business Licence.
FOURTH:
The exception for the use of subsidiaries and/or affiliates in the mineral and coal mining services business through approval as referred to in the SECOND Dictum can only be granted to holders of Mining Business Licences or Special Mining Business Licences who are currently carrying out assignments by the Government, including:
implementation of national strategic projects;
construction of mineral processing and/or refining facilities or coal development and/or utilisation activities; and/or
fulfilment of minerals or coal for domestic needs.
FIFTH:
Applications for approval to use subsidiaries and/or affiliates as referred to in the FOURTH Dictum shall be submitted to the Minister.
SIXTH:
The granting of approval for applications to use subsidiaries and/or affiliates in the mineral and coal mining services business by the Minister shall be provided within a period of 14 (fourteen) working days from the date the application is received completely and correctly.
SEVENTH:
Approval for the Use of subsidiaries and/or affiliates in the mineral and coal mining services business:
is granted in accordance with the field and sub-field of the Mining Service Business Licence of the subsidiary and/or affiliate as per the application submitted; and
remains valid until the expiry of the term of the Mining Service Business Licence of the subsidiary and/or affiliate.
EIGHTH:
For Mining Business Licences issued by a Governor within their authority, applications for approval to use subsidiaries and/or affiliates may be submitted to the Governor.
NINTH:
In the event of administrative errors and/or evaluation errors in the process of issuing approval or rejection of approval for the use of subsidiaries and/or affiliates in the Mineral and Coal mining services, corrections may be made by the Minister or Governor according to their authority.
TENTH:
The provisions of this Ministerial Decree shall apply mutatis mutandis to holders of Special Mining Business Licences as a Continuation of Contract/Agreement, holders of Contract of Work, and holders of Coal Mining Business Agreement.
ELEVENTH:
Upon the effective date of this Ministerial Decree, the Regulation of the Director General of Minerals, Coal, and Geothermal Number 376.K/30/DJB/2010 regarding Procedures and Requirements…