Production Control Strategy and Mining Permits: Efforts to Maintain Industry Stability
JAKARTA, KOMPAS.com — The government is pursuing strategies for production control and the reorganisation of mining business permits to maintain industry stability amid increasingly uncertain global pressures.
The minerals and coal sector is currently operating in a landscape influenced by geopolitical conflicts and competition for critical minerals, shifting policy direction from merely pursuing production volumes to maintaining market balance.
“We know that we are currently in a world where the rhythm is no longer known or clear. What is certain is that it is unstable,” said Secretary of the Directorate General of Minerals and Coal at the Ministry of Energy and Mineral Resources, Siti Sumilah Rita Susilawati, during a discussion in Jakarta on Friday (10/4/2026).
“We are in a situation where critical minerals are becoming very important, with everyone competing for them,” Rita stated.
“The government is adjusting production, not restricting it, but more towards control,” Rita added.
The value over volume approach is being used because increased production does not always correlate directly with state revenues.
“Volume, when we produce a lot, does not correlate directly with the state income we can generate,” she said.
In addition, the government is changing the RKAB scheme to annual to make supply control more flexible, while ensuring that domestic market obligation (DMO) requirements are met.
“For the domestic market obligation, we all must comply. We must fulfil it; that way we can survive,” Rita emphasised.
Member of Commission VII of the Indonesian House of Representatives, Jamaludin Malik, expressed support for the government’s steps to evaluate and revoke problematic Mining Business Permits (IUP), especially in protected forest and conservation areas.
“The President’s step to revoke problematic IUPs, particularly those in protected forest areas, is a firm action that needs to be supported together,” Jamaludin said in Jakarta, via his statement, on Friday (10/4/2026).
He assessed that this step demonstrates the government’s commitment to improving governance in the mining sector to make it more orderly and sustainable.
“The steps taken by the Minister of Energy and Mineral Resources show the government’s commitment to reorganising mining permits to be more accountable and provide legal certainty for all business actors,” he added.
He emphasised that cleaning up problematic IUPs will have a positive impact on investment quality, as only compliant business actors can continue operations.
Furthermore, he highlighted the importance of synchronising IUP and RKAB so that production remains controlled, price stability is maintained, and state revenues are optimised.
Next, he said, as a partner to the government, Commission VII of the House of Representatives will continue to oversee the IUP evaluation process to ensure it runs according to regulations and benefits the state and society.
“The problem is, even if you have the money to buy, but if the goods are not available, what then?” said Deputy Chair of the IMA Communication Sector and also President Director of PT Vale Indonesia Tbk, Bernandus Irmanto, regarding the sulphur supply for the High Pressure Acid Leach (HPAL) process, during the discussion.
According to him, this situation is pushing industry players to diversify raw materials, including utilising alternatives such as pyrite and industrial waste phosphogypsum.
In addition, the nickel industry also faces sustainability challenges due to reliance on oil-based fuels like Marine Fuel Oil (MFO) and diesel. Electrification efforts are being studied, though they still face productivity constraints.
On the other hand, downstreaming remains the main direction, but it still depends on foreign investment and technology, particularly from China, which adds to the complexity of geopolitical risks.
“We hope it can be fulfilled according to capacity; currently, only a 30 percent quota is given,” he revealed.
Bernandus reminded of the importance of maintaining a balance between supply control and demand so that prices remain healthy.
“If we control supply, the hope is that demand remains, so prices rise. But if we control supply and demand drops, prices won’t be good either,” he said.
“Don’t let us hope for an increase, but end up killing the dream that nickel will be a major driver of the energy transition,” Bernandus added.