Mining quotas regulate the annual volume a company is allowed to produce.
Indonesia stands at the forefront of the global mining industry. With its rich reserves of coal, nickel, bauxite, copper, and tin, the country plays a pivotal role in powering the world’s energy transition and manufacturing supply chains. However, amid increasing environmental concerns and the push for economic sustainability, the Indonesian government has taken a bold step by introducing new mining quota rules in Indonesia. These changes aim to bring greater transparency, discipline, and fairness to mineral extraction activities. As a result, businesses involved in mining must now recalibrate their legal and operational strategies to stay compliant and competitive.
To understand the significance of the new policy, it is essential to examine the legal backbone. The foundation lies in Law No. 2 of 2025 (amending Law No. 4 of 2009) on Mineral and Coal Mining (known as the Minerba Law), which sets out the overarching legal regime. Complementary regulations include:
These regulations assign the power to issue and oversee quotas to the MEMR, working closely with the Directorate General of Mineral and Coal (Ditjen Minerba) and regional authorities in cases involving local IUP. This structured framework ensures that mining operations remain accountable, environmentally compliant, and aligned with national objectives.
Beginning in 2024, the Indonesian government revamped its quota system to address key inefficiencies. Previously, quota allocation was opaque, often delayed, and susceptible to manipulation. Under the new rules, several critical changes were introduced:
This shift toward data-driven governance reflects Indonesia’s commitment to curbing illegal mining, enhancing fiscal accountability, and supporting downstream value addition. Importantly, the new mining quota rules in Indonesia now place the onus on companies to prove their reliability before receiving approval.
READ MORE:
But what exactly is the government trying to achieve? Fundamentally, this reform serves four strategic purposes:
Collectively, these goals signify a paradigm shift—from production-centric regulation to performance- and sustainability-based policy.
To obtain a production quota, companies must now undergo a multi-factor evaluation process. The key criteria include:
Moreover, each of these components contributes to a composite score, which is then used to approve, reject, or adjust requested quotas.
Navigating the new mining quota rules in Indonesia requires precision and diligence. Here’s how companies can manage the application process:
Failing to meet any step may result in rejections or significant delays.
Compliance is no longer optional—it’s a legal necessity. Under the new system, companies that fail to comply may face serious legal repercussions. These include:
Moreover, government audits may lead to criminal investigations in cases of fraudulent quota claims or environmental breaches. Legal foresight and proactive compliance are now indispensable for survival in this sector.
READ MORE:
The new mining quota rules in Indonesia apply universally, including existing IUP and IUPK holders. Nevertheless, transitional measures have been introduced to ease the adjustment. Companies are given:
Importantly, even companies with long-standing permits must realign with the new quota calculation formula, or risk quota reduction or revocation.
Mining is no longer judged solely by production metrics. Today, environmental and social responsibility is central to regulatory approval. The government now monitors:
These factors directly influence a company’s eligibility for full or partial quotas. Although a company may meet other technical criteria, a poor ESG score could mean reduced quotas. Therefore, integrating ESG into business operations is not just a moral choice—it’s a strategic imperative.
Despite the intended improvements, the new system is not without its flaws. Businesses are likely to encounter:
Therefore, understanding these barriers early on allows companies to prepare mitigation strategies and seek legal support before problems arise.
To effectively operate under the new regime, companies should:
Staying ahead of the curve reduces risk, maximizes operational continuity, and protects your legal standing.
READ MORE:
At Kusuma & Partners, we’ve witnessed firsthand the confusion and uncertainty many mining clients face in adapting to these sweeping changes. From unclear RKAB formats to navigating the SIMBARA system, the regulatory landscape can be daunting. Our legal professionals offer end-to-end solutions—from document preparation, compliance, quota negotiations, to dispute resolution. We understand how crucial it is to balance commercial goals with legal certainty, especially in Indonesia’s rapidly evolving mining ecosystem. If your company operates in mining, partnering with us means peace of mind and regulatory confidence.
In summary, the new mining quota rules in Indonesia reflect a maturing legal framework that promotes environmental integrity, operational discipline, and regulatory transparency. For companies, these rules present both a challenge and an opportunity. Those who embrace compliance, invest in ESG, and plan ahead will thrive in this new environment. However, those who ignore the legal shifts may find themselves sidelined by sanctions and setbacks.
Need guidance on mining quotas, RKAB compliance, or compliance? Contact us today for tailored legal solutions that ensure you’re not just compliant—but ahead.
Fill in the form below to get our expert guidance.
“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”
What happens when a director fails to act in the best interest of a company in Indonesia? Can they be personally sued or even jailed? The answer is yes—and the legal framework in Indonesia clearly lays out both civil and criminal consequences. Understanding Director’s Liability Under Indonesian Law: Civil and Criminal Consequences is vital for […]
Indonesia is emerging as one of Southeast Asia’s most dynamic investment destinations. With its expanding consumer market, robust natural resources, and government initiatives aimed at attracting foreign capital, Indonesia holds immense potential for international investors. However, along with these opportunities comes a complex legal landscape that can pose significant challenges. Foreign investors must understand not […]
Facing mounting debts or unpaid invoices from a debtor? Or perhaps your company is overwhelmed with liabilities it cannot repay in time? In Indonesia, a powerful legal tool exists to provide breathing space for restructuring debt: PKPU (Penundaan Kewajiban Pembayaran Utang), or Debt Payment Suspension. This mechanism is designed to allow debtors and creditors to […]
