In brief
Indonesia’s Coordinating Minister for Downstreaming and Energy Transition announced on Thursday at the 2026 Mineral and Coal Convention Expo that new mining regulations will be introduced to ensure that profits from nickel and coal extraction are distributed more broadly across the country, not just concentrated in Jakarta. The measures aim to give cooperatives, region‑owned enterprises and micro‑small‑medium enterprises (MSMEs) greater access to mining opportunities, with a constitutional mandate behind the fairness pledge.
Bahlil Lahadalia, Indonesia’s Coordinating Minister for Downstreaming and Energy Transition, opened the 2026 Mineral and Coal Convention Expo in Jakarta on Monday and pledged the government would revise its mining regulations so that regions outside Jakarta receive more benefits from the country’s mineral wealth.
The minister said he was concerned that most companies holding nickel and coal mining permits were headquartered in Jakarta, although the commodities were extracted primarily in Kalimantan, Sulawesi, and Maluku.
The announcement underscores a shift from a model that concentrated revenue in the capital to one that seeks a more equitable distribution of the mining sector’s economic upside."We want people in the regions to become both participants in and beneficiaries of development through the management of local natural resources," Lahadalia said.
Reforming Rules to Include Local Stakeholders
Lahadalia highlighted plans to change the regulatory framework so that it better accommodates cooperatives, region‑owned enterprises and MSMEs. The reforms are part of the broader downstreaming policy that aims to generate greater economic value from natural resources. The minister emphasized that the government must prevent opportunities in the sector from becoming concentrated among a narrow group of firms.
Tri Winarno, director general of minerals and coal at the Ministry of Energy and Mineral Resources, underscored the constitutional obligation to manage assets for the greatest benefit of the people.
The quote reflects a legal and moral imperative to ensure that natural resource extraction serves the broader population, not just corporate interests."Our mineral and coal resources must be managed in a way that strengthens national industries, creates jobs, and delivers tangible benefits to local communities," Winarno said.
Under the proposed changes, regions that host major mining activities will have increased leverage to secure local participation agreements. Local businesses could negotiate the management of value‑added processing and market access, moving beyond the traditional model where downstream facilities and final production stages remain concentrated near Jakarta.
Community groups in Kalimantan, Sulawesi and Maluku have long argued that the region receives little direct benefit from nickel and coal extraction. Local SMEs report limited opportunities to supply equipment or provide disposable services to mining companies. With the new regulations, the aim is to enable these enterprises to become suppliers, partners, or co‑owners in the supply chain, thereby creating employment and fostering sustainable development in the provinces.
The reforms also promise a broader policy shift toward inclusive governance of critical resources. By making it legally easier for cooperatives and MSMEs to participate in mining contracts, the government supports pluralistic economic development and aligns with international standards on responsible resource management. This could bolster local public trust in the mining sector, a key civic stake since resource inequality has often attributed to corruption and uneven wealth distribution.
While the announcement marks a significant policy direction, details on how the revised regulations will be drafted, the timeline for implementation, and how to measure fairness remain to be clarified. The officials highlighted the need for a coordinated approach among ministries, local governments, and the private sector to ensure the reforms translate into tangible benefits for ordinary citizens.
In a broader context, these changes come at a time when Indonesia is seeking to safeguard its natural resources while advancing economic growth. The consent of local communities and the participation of small and medium enterprises are pivotal for maintaining social cohesion and preventing conflict that has historically disrupted mining operations. The announcement by Bahlil Lahadalia therefore represents a notable attempt to balance national development priorities with civic accountability and equitable resource distribution.
