Video: LEMHANAS Says Oil and Gas Profit-Sharing Scheme Proposed for Mining

Jakarta, CNBC Indonesia – LEMHANAS natural resources expert Edi Permadi said geopolitical volatility in the Middle East and the ongoing Russia-Ukraine conflict have impacted Indonesia’s mining industry.

Geopolitical uncertainty has pushed up prices of several energy commodities, including coal, with improvements to the 2026 Coal Work and Budget Plan (RKAB) expected to boost investment and revenue in the coal sector.

For the nickel sector, rising fuel and sulphuric acid costs are feared to increase production costs, particularly in High Pressure Acid Leaching (HPAL) nickel smelter projects. Meanwhile, the tin and copper sectors are considered resilient to global geopolitical volatility.

LEMHANAS is urging transformation and efficiency in the mining sector to tackle global market volatility. It also advocates for improved government public communication on global and national dynamics in the mining sector, to be handled by the Coordinating Ministry for Economic Affairs and Danantara.

Regarding the government’s proposal to apply the Production Sharing Contract (PSC) model from the oil and gas sector to mining, LEMHANAS considers this still in early stages given the vastly different business models between the two sectors. Therefore, long-term efforts are needed to attract investors for exploration to maintain domestic production.