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View all search results60% mining profit-sharing rule applies only to certain firms, govt says
Industry players cautioned that the policy must be clearly communicated to avoid misinterpretation that could undermine business confidence.
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Illegal sand quarries are seen on April 22. (AFP/Chaideer Mahyuddin)
T
he government has clarified that the controversial profit-sharing requirement between mining companies and universities applies only to priority mining permit holders that partner with higher education institutions, not to all operators.
However, industry players cautioned that the policy must be clearly communicated to avoid misinterpretation that could undermine business confidence.
The provision, stipulated in Energy and Mineral Resources Ministerial Regulation No. 7/2026 on risk-based business activity standards, signed on June 8, requires at least 60 percent of a miner's net profit to be allocated to universities through a priority distribution mechanism from the start of production.
“[The rule applies only to] priority IUP [mining business permit] holders that collaborate with universities,” Energy Ministry coal and minerals director general Tri Winarno told The Jakarta Post on Friday.
Ardhi Ishak, head of industrial relations at the Indonesian Mining Experts Association (Perhapi), traced the rule's legal basis to the Mineral and Coal Mining Law No. 2/2025 and Government Regulation No. 39/2025, which introduced priority granting of Special IUPs to micro, small and medium enterprises (MSMEs), cooperatives and collaborations with universities.
"We believe this is a derivative regulation regarding the priority granting of Special IUPs," Ardhi said to the Post on Friday.
Under Article 51a of the Mineral and Coal Mining Law No. 2/2025, the central government is empowered to grant priority business license mining areas (WIUP) to state-owned enterprises, regionally-owned enterprises or private business entities for the benefit of higher education institutions.
