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Law No. 2 of 2025 is the fourth statutory amendment to UU Minerba (Law No. 4 of 2009), the foundational legislation governing Indonesia's mining sector. Where the third amendment (UU 3/2020) recentralised licensing authority to the central government and the 2020-2024 wave of ministerial regulations (Permendag 7/2017, Permendag 10/2024, Permenperin 35/2025, PP 19/2025) operationalised hilirisasi via sub-statutory instruments, the Fourth Amendment moves several core elements into primary legislation — converting executive policy into statutory obligation that future ministerial swings cannot easily unwind.
Key statutory shifts:
(Izin Usaha Pertambangan) or IUPK (Izin Usaha Pertambangan Khusus) at the production-operation stage must satisfy domestic demand — with explicit priority to BUMN/BUMD serving the public interest — before exporting. This anchors the hilirisasi doctrine at the statute level for the first time, rather than relying on rolling Permendag instruments.
business entities, and BUMN/BUMD.** WIUPs (mining business areas) for metallic minerals and coal may be auctioned or directly assigned to small/medium enterprises, cooperatives, business entities owned by religious community organisations (the Nahdlatul Ulama and Muhammadiyah pathways are the most discussed), and state/regional enterprises. Priority is contingent on investment scale, value-add potential, and job creation. This is a controversial governance shift critiqued by environmental NGOs and tax-policy analysts as patronage-accommodation; universities are not in the preferential allocation list (they receive a share of mining-profit allocations for higher-education funding instead).
issuance and approved RKAB (Rencana Kerja dan Anggaran Biaya — work plan and budget) production quotas, formalising what had been an administrative bottleneck. This operationalises the Bahlil/Prabowo-era supply-management strategy: production output is not a corporate decision under the licence terms, it is a state-managed quota, recalibrated annually with explicit reference to "resource availability, production capacity, and domestic needs".
designation of mining areas now ties allocation to resource availability, production capacity, and domestic needs — reinforcing the supply-management framing.
formally widen from nickel and bauxite to copper, cobalt, manganese, tin, and zinc, providing statutory cover for the rolling Permendag bans on those concentrates.
The action complements two adjacent 2025 measures already in the IPTM register: PP 19/2025 (the tiered-royalty regulation, which is the fiscal arm of the same hilirisasi framework, executed under the amended primary law) and Danantara (the sovereign wealth fund vehicle absorbing BUMN mining stakes).
Severity 4 (qual). This is structural — it converts ministerial discretion into statutory obligation across Indonesia's entire metallic minerals and coal complex. Indonesia is the dominant global supplier of nickel (~50% of mined output), a top-five bauxite producer, and a material copper concentrate producer (Grasberg, Batu Hijau). A statutory entrenchment of hilirisasi removes the residual probability that a future administration could roll back the Permendag bans by ministerial fiat — those bans are now backed by primary legislation. Not severity 5 because the amendment does not impose immediate new quantitative export restrictions on top of existing Permendag instruments; it codifies and extends rather than escalates.
Western nickel/copper consumers — hilirisasi is now durable across electoral cycles.
(Morowali, Weda Bay, Konawe template) into copper, cobalt, and tin refining capacity — the same Indonesia-China processing axis that consolidated nickel since 2020 will likely extend.
CRMA — Indonesian-processed metals will be increasingly Chinese-financed, complicating qualification under Western industrial-policy benchmarks.
exposure: the religious-organisation and SME priority allocation pathway is opaque, rent-allocating, and politically embedded.
by Indonesia's 2020 nickel-ore ban and emulated by Chile (lithium), Argentina (RIGI), Zimbabwe (lithium concentrate), and DRC (cobalt) — the IPTM register's em-resource-upstream-capture theme.
Permen ESDM) will operationalise the SME/cooperative/religious-org allocation procedure, and what scale of WIUP will be reserved?
Indonesia, Vale Indonesia, Amman Mineral) under the tightened RKAB-linked production-quota regime — already a flashpoint in Freeport's 2024-25 production negotiations.
bauxite, tin, or coal export-restriction roadmap (statutory cover exists, but Permendag operationalisation is still pending for several commodities).
challenge against statutory hilirisasi would test whether primary-legislation cover changes the WTO panel's analytical approach.