Indonesia signals mining policy overhaul as Jakarta seeks higher state revenue

Indonesia’s energy minister is reviewing the country’s resource management rules as the government looks for ways to increase revenue from the mining sector without discouraging investors.

Energy and Mineral Resources Minister Bahlil Lahadalia. Photo: YouTube/ Sekretariat Presiden

JAKARTA - Energy and Mineral Resources Minister Bahlil Lahadalia said the review followed an instruction from the president to ensure mining policies reflect Article 33 of the Constitution, which places natural resources under state control for public welfare, as Jakarta searches for new funding sources for social and infrastructure programs.

“The President has instructed us to find a formula that better serves the national interest,” Bahlil told reporters in Jakarta on Wednesday. “Our orientation is based on Article 33 of the Constitution. Everything must be managed to improve the welfare of our people.”

Bahlil acknowledged the challenge of balancing higher state income with the need to maintain a healthy business climate for private operators, which dominate Indonesia’s coal and nickel sectors.

“While we aim to increase state revenue, we must ensure the ecosystem remains conducive for investors and operators,” he said.

He declined to elaborate on specific policy options, including the long-discussed Coal Compensation Fund, saying the matter was still under discussion. Bahlil also said the government was considering whether some strategic mining areas could be managed by state-owned enterprises, but gave no timeline.

Indonesia’s mining sector has seen frequent regulatory changes in recent years, including export bans and shifting divestment requirements, which investors say have added to policy uncertainty. Any move to increase the state’s share of mining revenue could affect the viability of capital-intensive projects, particularly in nickel and copper.