Mining companies are waiting for certainty regarding approval of the 2026 Work Plan and Budget (Rencana Kerja dan Anggaran Belanja/RKAB) from the Ministry of Energy and Mineral Resources (ESDM).
Although a circular letter has been issued allowing operational flexibility until March 31, 2026, RKAB approval is still required to ensure the continuity of mining operations. “Uncertainty over RKAB issuance will affect investment decisions,” said Executive Director of the Indonesian Coal Mining Association (APBI), Gita Mahyarani, on Tuesday, January 6, 2026.
The delay in issuing the 2026 RKAB comes amid the government’s plan to cut coal and nickel production. While acknowledging the government’s objective of keeping commodity prices at reasonable levels, Gita emphasized that such policies must be measurable, data-driven, and account for industry structure—including contractual obligations, domestic market obligations (DMO), and supply chain readiness. “The principle is that policies should not create new uncertainties or undermine Indonesia’s credibility as a producer,” she said.
One company affected by the delayed issuance of the 2026 RKAB is PT Vale Indonesia Tbk. The Indonesia Stock Exchange–listed company (ticker: INCO) has temporarily halted its operations.
Vale Indonesia’s Corporate Secretary, Anggun Kara Nataya, said the temporary suspension of operations across all Special Mining Business Permit Areas (IUPK) would remain in effect until the RKAB is issued. “This is to ensure that all business activities are conducted in accordance with regulations,” she said in a disclosure to the Indonesia Stock Exchange on Friday, January 2, 2026.
The Ministry of ESDM has issued Circular Letter No. 2.E/HK.03/DJB/2025, which permits companies to continue operating at up to 25 percent of their production capacity until March 31, 2026.
However, Director General of Minerals and Coal at the Ministry of ESDM, Tri Winarno, said the flexibility applies only to companies that have submitted three-year RKABs. Vale Indonesia does not fall into this category. “Vale submitted an extension request. For 2026, its RKAB is empty,” he said on Monday, January 5, 2026.
Tri explained that the issuance of the 2026 RKAB is still being processed due to revisions, including the government’s plan to adjust coal and nickel production targets for 2026. “It is not a production cut, but an adjustment,” he said.
On December 19, 2025, Minister of Energy and Mineral Resources Bahlil Lahadalia stated that production cuts for both commodities would be implemented in 2026 to maintain market prices. One of the tools the government uses to control production is the RKAB.
To ensure compliance, Bahlil said the government would review submitted RKABs. “For those who comply with state regulations, I have already calculated them. For those that do not comply, I have not,” Bahlil said at the time.
Executive Director of the Center for Energy and Mining Law Studies, Bisman Bakhtiar, agreed that cutting coal and nickel production could restrain supply and support prices. However, its effectiveness would be limited if global demand remains moderate. On the other hand, the policy also carries the risk of reducing state revenue.
According to Bisman, when production cuts delay RKAB approval, there is a risk of lower realized coal and nickel production. Another risk is increased regulatory uncertainty, which could affect the sustainability of investment in the mining sector. “Investors need certainty regarding production volumes and permit continuity for financial planning and long-term contracts,” he said on Wednesday, January 7, 2026.
Beyond production cut plans, delays in issuing the 2026 RKAB are also due to changes in the approval mechanism, from three-year approvals to annual approvals. Chairman of the Indonesian Mining Professionals Association (Perhapi), Sudirman Widhy Hartono, said the change could delay approvals, given the large number of mining companies operating in Indonesia.
National Coordinator of Publish What You Pay (PWYP) Indonesia, Aryanto Nugroho, said the uncertainty has become a negative signal for the sustainability of mining investment. According to him, investors view the delay in approving the 2026 RKAB as an indication that digitalized licensing systems such as MinerbaOne are not yet fully capable of overcoming bureaucratic obstacles.
Meanwhile, the issuance of the Minister of ESDM’s circular letter has not been sufficient to mitigate these risks. “This policy does not provide certainty for companies that require long-term planning or that have large export contracts,” Aryanto said.
Source: Tempo