Govt to prioritise higher royalty-paying miners in quota revisions, minister says
Tuesday, August 4 2026 - 07:59 AM WIB
By Calvin Purba
The government will prioritise mining companies that make larger contributions to state revenue when approving revisions to their production quotas under a planned relaxation of mining output controls, Energy Minister Bahlil Lahadalia said on Monday.
The government is preparing a more flexible approach to revisions of miners' Work Plan and Budget (RKAB), which determines annual production quotas, allowing output to be adjusted according to market conditions and domestic processing needs.
"I have to prioritise those that pay higher royalties. Every policy we make must deliver the greatest possible benefit for the interests of the state," Bahlil told reporters.
Indonesia, the world's largest producer of nickel and a major coal exporter, announced in June that it would adopt a more flexible approach to coal and nickel production quotas after earlier cutting approved output to help support prices.
Bahlil said the government would allow higher production when commodity prices are favourable but tighten supply if prices weaken to maintain market balance.
"If prices are strong, we will increase production. If prices begin to plateau, we will also introduce policies to maintain the balance between supply and demand," he said.
The government previously reduced approved coal production for 2026 to around 600 million metric tons from about 790 million tons in 2025, aiming to support prices while maximising state revenue and foreign exchange earnings.
In the nickel sector, Bahlil said the government could revise production quotas to ensure sufficient ore supplies for domestic smelters after industry concerns that planned output of around 250 million to 260 million wet metric tons (wmt) this year may be insufficient.
He said the ministry would align mining quotas with the raw material requirements of processing plants to maintain operations and support downstream investment.
Industry groups estimate nickel ore demand could reach around 350 million wmt in 2026, driven by existing and newly commissioned smelters, and have warned that overly restrictive mining quotas could disrupt ore supplies, lower smelter utilisation rates and affect employment.
Energy ministry officials had previously said revisions to 2026 RKAB production quotas would be completed by the end of July.
Editing by Reiner Simanjuntak