Ministry of Energy and Mineral Resources Incentives

The Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources (ESDM) provides a benchmark for the mining sector investment target of US $ 5.98 billion for 2021, which comes from 248 companies. In detail, the investment comes from 21 companies with Contract of Work (KK) status, 48 ​​companies with PKP2B status and 3 Mining Business Permits (IUP) BUMN. In addition, there are 2 companies with IUPK status, 30 Coal Center IUPs, 18 Mineral Center IUPs, 17 Pure Olah OPK IUPs, 77 regional IUPs, and 35 Mining Service Business Permits (IUJP) companies.

The Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources Ridwan Djamaludin conveyed the government’s strategy to achieve mineral and coal investment in 2021 by spurring downstream mining projects. The strategy will closely monitor smelter construction and impose sanctions on companies that fail to meet the targets set.

In addition, the government will provide incentives for solving permit problems, such as the Borrow and Use of Forest Friends (IPPPKH).

Based on the newly issued Minerba Law, the Directorate General of Mineral and Coal has conducted an evaluation for the establishment of 17 Mining Business Permit (WIUP) and Special Mining Permit Areas (WIUPKs) consisting of 14 WIUP and 3 WIUPK. However, the process for the law is still pending and 17 mining blocks have yet to be determined.

Chairman of the Association of Indonesian Geologists (IAGI) Sukmandaru Prihatmoko assessed that the minimal realization of mineral and coal investment last year occurred due to the transition period of the Minerba Law from Law no. 4/2009 to Law no. 3/2020. Moreover, the regulations derived from the new Minerba Law have not yet been published. So that investors are still wait and see.

Sukmandaru also said that investors need legal certainty and investment and the value of KDI must be ensured to be competitive in order to attract investors. He also emphasized the need for the issuance of Government Regulations (PP) and derivative regulations of the Minerba Law.

He is of the view that even though the conditions in 2021 are still overshadowed by the Covid-19 pandemic, investor interest is still possible to capture. Provided, the mining area auction is attractive with the determination of the area to be auctioned based on its potential, geological data and commodity priority.




  • The Plaza Office Tower, 19th Floor Jalan MH Thamrin Kav. 28-30 Jakarta Pusat 1035


© 2020 Asiadrill Bara Utama, All Rights Reserved
Scroll to top