The Fourth Amendment to the Mining Law:A New Chapter for Indonesia’s Mining Regulations

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To enhance efficiency and legal certainty in the mining sector, on 19 March 2025, the government has enacted Law No. 2 of 2025 concerning the fourth amendments to Law No. 4 of 2009 on Mineral and Coal Mining (“Amendment of Mining Law”). This Law introduces key changes, including provisions on funding for higher education institutions, revised business licensing mechanisms, and regulations on overlapping land use. This regulation aims to strengthen governance, accelerate resource-based industrialization, and ensure a more equitable distribution of benefits to the public.

This ARMA Update will outline the key proposed changes, analyse their potential impact on the mining sector, and provide insights into what stakeholders should anticipate moving forward.

1. Funding for Higher Education Institutions from Mining Profits

   One of the key changes in the Amendment of Mining Law is the introduction of a funding mechanism for higher education institutions through the management of Mining Business License Areas (Wilayah Izin Usaha Pertambangan - “WIUP”) and Special Mining Business License Areas (Wilayah Izin Usaha Pertambangan Khusus - “WIUPK”). On the Amendment of Mining Law, the government prioritizes State-Owned Enterprises (Badan Usaha Milik Negara - “BUMN”), Regional-Owned Enterprises (Badan Usaha Milik Daerah - “BUMD”), and private companies in obtaining WIUP and WIUPK, provided that a portion of their profits is allocated to support higher education autonomy and service improvements. ^[1] This provision aims to provide an alternative source of funding for higher education institutions to enhance the quality of education and research.

2. Granting of Business Licenses Through Auctions and Priority Allocation

   The Amendment of Mining Law also introduces additional provisions on the mechanism for granting business licenses. Previously, WIUP could only be granted to businesses, cooperatives, or individual companies (Perusahaan perorangan) through auctions. However, this regulation allows WIUP to also be granted to small and medium enterprises (“SMEs”) or business entities owned by religious organizations. These licenses are granted through two main mechanisms: ^[2]

   1. Auctions WIUP and WIUPK offered through an auction process will be assessed based on the applicant’s area of the Metal Mineral WIUP, administrative, technical, and financial capacity.

      The auction process is expected to increase transparency in the issuance of mining business licenses and ensure that only entities with sufficient expertise and capacity are granted permits.

   2. Priority Allocation

      1. Business licenses may be prioritized for cooperatives, SMEs, and business entities owned by religious organizations.
      2. BUMN and BUMD are also given priority in obtaining WIUP and WIUPK to support national strategic interests.
      3. The priority licensing mechanism aims to empower local economies and ensure that natural resources are managed sustainably for national benefit.

3. New Provisions on Overlapping Land Use

   The Amendment of Mining Law also address overlapping land use issues within the mining sector. For mining business licenses issued before the enactment of the Amendment of Mining Law that are later found to overlap following a government review, such licenses will be revoked and returned to the state. This aims to improve accountability in land management and prevent conflicts among mining operators. In cases where multiple mining business licenses overlap, the central government will conduct an evaluation to guarantee legal certainty for business operators. ^[3]

   In addition, the results of the evaluation, revocation, and return, as mentioned above, shall be communicated publicly by the central government, providing the relevant parties with the opportunity to clarify within a maximum period of 14 (fourteen) days from the date of notification of the evaluation results, revocation, and return of the IUP. ^[4]

4. Additional Key Provisions in the Amendment of Mining Law

   1. Domestic Market Obligation (DMO) for Coal The Amendment of Mining Law also reinforces the Domestic Market Obligation (DMO) for coal. Holders of Mining Business Licenses (IUP) and Special Mining Business Licenses (IUPK) are required to prioritize domestic coal supply before selling it internationally. ^[5] It is important to be noted that the Central Government has the authority to determine production levels, pricing, and distribution to ensure a stable national energy supply and support strategic industries. ^[6]
   2. Business Licensing Through Online Single Submission (OSS) Provisions related to business licensing issuance also have been updated, which states that the issuance of business licenses must follow the integrated electronic licensing system managed by the Central Government, in accordance with prevailing regulations (Online Single Submission (OSS) system). ^[7]
   3. Community Development and Empowerment Under the Amendment of Mining Law, IUP and IUPK holders are required to develop community development and empowerment programs, which must now be consulted not only with the Minister and the government but also with indigenous and local communities, which the development and empowerment community programs consist of: ^[8]
      1. social and environmental responsibility programs;
      2. involvement of local communities and indigenous peoples in the Mining area in Mining activities; and
      3. business partnership programs and community-based economic empowerment.
   4. Revenue Management from Non-Tax State Revenue The Amendment of Mining Law introduces a new provision stating that a portion of non-tax state revenue (Penghasilan Negara Bukan Pajak - PNBP) collected from mining activities will be managed by the Minister, in accordance with applicable laws and regulations, to enhance supervision and development efforts in the sector. ^[9]
   5. Timeline for Implementing Government Regulations The Amendment of Mining Law also shorten the timeframe for issuing implementing regulations. Under the previous Mining Law, the implementing regulations had to be issued within one (1) year after the enactment of the law. However, under this regulation, implementing regulations must now be issued within a maximum of six (6) months from the date the law comes into effect. ^[10]

The Amendment of Mining Law reflect the government’s commitment to improving mining governance, increasing transparency, and ensuring that the sector contributes more significantly to national economic growth. By introducing funding for higher education, refining business licensing mechanisms, and addressing overlapping land use issues, the amendments aim to create a more structured, fair, and sustainable mining sector.

With these regulatory changes, Indonesia’s mining industry is expected to become more competitive and better aligned with national development goals, ensuring that mineral and coal resources benefit the broader population while maintaining environmental and legal sustainability.

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1. Article 51A of the Amendment of Mining Law. ↩︎

2. Article 51 of the Amendment of Mining Law. ↩︎

3. Article 171B paragraph (1) of the Amendment of Mining Law. ↩︎

4. Article 171B paragraph (3) of the Amendment of Mining Law. ↩︎

5. Article 5 paragraph (3) of the Amendment of Mining Law. ↩︎

6. Article 5 paragraph (2) of the Amendment of Mining Law. ↩︎

7. Article 35 paragraph (5) of the Amendment of Mining Law. ↩︎

8. Article 108 of the Amendment of Mining Law. ↩︎

9. Article 141B of the Amendment of Mining Law. ↩︎

10. Article 174 of the Amendment of Mining Law. ↩︎

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Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.

Go to

1. Funding for Higher Education Institutions from Mining Profits
2. Granting of Business Licenses Through Auctions and Priority Allocation
3. New Provisions on Overlapping Land Use
4. Additional Key Provisions in the Amendment of Mining Law

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