The Indonesian Ministry of Energy and Mineral Resources issued a ministerial decree tightening regulations on how mining permit holders use subsidiaries and affiliates for mineral and coal mining services. Signed by Energy and Mineral Resources Minister Bahlil Lahadalia on September 18, 2026, and reported on September 28 by Kontan, the policy aims to curb companies from handling all operational activities internally without engaging outside providers.
Regulatory Restrictions on Mining Affiliates
Under Ministerial Decree Number 365.K/MB.01/MEM.B/2026, holders of a mining business license (IUP) or special mining business license (IUPK) must use companies holding a mining services business license (IUJP). The regulation mandates that permit holders prioritize mining service providers located around the regency or city of their respective mining business areas.
Permit holders are barred from involving subsidiaries or affiliates in mineral and coal mining services without prior approval from the Energy and Mineral Resources Minister, as detailed by KabarBursa.com. This prohibition covers situations where an IUP or IUPK holder holds direct share ownership in an IUJP holder, or shares one or more beneficial owners with the service provider. Ministry of Energy and Mineral Resources Director General of Mineral and Coal Tri Winarno stated on September 29 that the policy prevents permit holders from executing all operations by themselves.
The rules apply mutatis mutandis to IUPK holders operating as a continuation of contract or agreement operations, Contract of Works holders, and coal contract of work (PKP2B) holders.
Exceptions for Strategic Projects and Domestic Obligations
The decree allows exemptions for using subsidiaries and affiliates, provided the permit holder secures ministerial approval. Ministry guidelines restrict these exemptions to IUP and IUPK holders carrying out government assignments, specifically:
- Execution of National Strategic Projects (PSN).
- Construction of mineral processing and refining facilities or coal development and utilization activities.
- Fulfillment of domestic mineral and coal needs.
Applicants must submit formal requests to the Ministry of Energy and Mineral Resources. According to the regulatory text cited by KabarBursa.com, the ministry must issue a decision within 14 working days after receiving a complete and correct application.
Market Reactions and Corporate Impacts
The policy introduces fresh policy uncertainty for conglomerates with vertically integrated mining operations. Market analysts identify several groups potentially affected by the restrictions, including the Adaro group ($ADRO, $AADI, $ADMR), the Bakrie group ($BUMI, $DEWA, $BRMS), and the Barito group ($CUAN, $PTRO, $SINI), subject to final clarity on exemptions.
DEWA informed Stockbit that the ministerial decree creates no material impact on the company because its contracts with PT Kaltim Prima Coal and PT Arutmin Indonesia align with National Strategic Projects and domestic market obligation (DMO). Conversely, independent third-party contractors saw positive stock movements on September 29, with $UNTR rising 3.28 percent and $DOID jumping 12.75 percent.
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