Indonesia plans to reduce the duration of mining production quotas (RKAB) from three years to one year, Investment Minister Bahlil Lahadalia said on Wednesday (2/7).

The decision aims to improve governance and tighten control over coal and ore supply levels.

Lawmakers Push for Return to Annual Quotas

The minister said the change was proposed by parliamentarians responsible for overseeing the mining sector.

He noted that the extended three-year quota system had weakened oversight and disrupted the balance between production and global demand.

“Because we allowed three-year RKAB, we could not control the balance between coal production and global demand ... Same thing happened to nickel, as well as bauxite,” Bahlil told members of parliament.

Original Policy Intended to Ease Red Tape

Indonesia introduced the three-year RKAB in 2023 to reduce bureaucratic hurdles for miners.

The RKAB determines how much mineral or coal a company can extract within a specific timeframe and is mandatory for all mining operations in the country.

Government Targets Market Stability and Higher Revenue

According to Bahlil, the policy reversal is expected to support the prices of coal and ores while increasing government revenue.

The tighter quota timeframe would enable authorities to better monitor supply levels and respond to market conditions.

Shift Highlights Policy Realignment in Mining Sector

The plan reflects a broader effort by the government to enhance control and oversight in a resource-rich sector critical to Indonesia’s economy.

No further details were provided on the timeline or implementation of the revised quota policy.

PHOTO: UNSPLASH

This article was created with AI assistance.