President Prabowo Subianto has instructed mining companies holding Special Mining Business Permits (IUPK) to fully comply with their downstream processing obligations, reaffirming his administration’s commitment to expanding Indonesia’s value-added mineral industry while warning that companies failing to meet their commitments could face government action.
The directive was delivered during a limited cabinet meeting at the Presidential Palace in Jakarta on Tuesday, according to Energy and Mineral Resources Minister Bahlil Lahadalia. The meeting was also attended by Aris Marsudiyanto, head of the Agency for Development Control and Special Investigation (Bappisus), and Dony Oskaria, head of the State-Owned Enterprises Agency (BP BUMN) and chief operating officer of Danantara Indonesia.
Speaking after the meeting, Bahlil said he briefed the president on the progress of downstream industrialization programs involving several domestic mining companies whose licenses had been extended from Coal Mining Concession Work Agreements (PKP2B) into Special Mining Business Permits.
Those companies, he explained, received permit extensions on the condition that they invest in downstream processing projects designed to increase the value of Indonesia’s natural resources before export.
“I reported to the president on the downstream processing programs of several national companies that received permit extensions from PKP2B to IUPK, one of whose obligations is to carry out downstream processing,” Bahlil said.
According to the minister, Prabowo emphasized that these commitments must be implemented strictly in accordance with existing regulations.
“The president instructed that these obligations must be fully implemented in line with the law,” Bahlil said. “If there are companies that fail to comply, appropriate and measurable steps must immediately be taken so they fulfill their obligations in accordance with Article 33 of the 1945 Constitution.”
Article 33 of Indonesia’s Constitution establishes that the country’s natural resources must be managed by the state and utilized for the greatest benefit of the Indonesian people. The provision has long served as the constitutional foundation for government policies promoting resource nationalism and domestic industrial development.
Downstream processing has become one of the flagship policies pursued by successive Indonesian administrations, particularly in the mining sector. The strategy aims to reduce reliance on exports of raw commodities by encouraging companies to process minerals domestically, creating higher-value products, attracting investment and generating more employment.
Indonesia has introduced a series of export restrictions on unprocessed minerals in recent years as part of that strategy, encouraging investment in smelters, refineries and other processing facilities across the country.
The discussion at Tuesday’s meeting extended beyond mining policy to include energy security and developments in global oil markets.
Bahlil said Prabowo also directed the Ministry of Energy and Mineral Resources to work closely with state electricity company PT PLN (Persero) to resolve power outages affecting several areas in Kalimantan.
“We acknowledge that there are still power outages in several locations, particularly in Kalimantan,” Bahlil said. “The president instructed me to immediately take concrete and measurable steps together with PLN so the problem can be resolved properly.”
The minister stressed that the outages were not caused by insufficient electricity supply or fuel shortages but were instead linked to maintenance work being carried out by the utility.
“Based on information from PLN, the issue is related to maintenance,” Bahlil said. “There is no problem with energy supply.”
The government has not disclosed how long the maintenance-related disruptions are expected to continue, but officials said efforts are underway to restore reliable electricity service across the affected areas.
The meeting also reviewed recent movements in global crude oil prices, which have remained an important consideration for Indonesia’s energy policy and fuel pricing decisions.
According to Bahlil, Prabowo instructed the government to keep subsidized fuel prices unchanged despite fluctuations in international oil markets, reaffirming the administration’s commitment to protecting household purchasing power and limiting inflationary pressures.
“The president instructed that subsidized fuel prices must not be increased,” Bahlil said.
At the same time, the government will continue monitoring global crude prices when determining prices for non-subsidized fuels.
Bahlil indicated that if international benchmark prices continue to decline, the government may consider adjusting retail prices for non-subsidized fuel products in line with market conditions.
“If the global Indonesian Crude Price declines, then non-subsidized fuel prices can also be considered for adjustment according to market prices,” he said. “If prices go down, then they should go down. They should not be increased.”
The remarks underscore the administration’s effort to balance fiscal discipline with affordability as Indonesia navigates volatile global energy markets while continuing to promote industrialization through downstream investment.
Prabowo has repeatedly identified downstream processing as a cornerstone of his economic agenda, arguing that increasing domestic processing capacity will strengthen Indonesia’s industrial base, reduce dependence on commodity exports and create greater long-term value from the country’s abundant natural resources.
Tuesday’s directives suggest the government intends to tighten oversight of companies benefiting from special mining permits while maintaining support for energy affordability through stable subsidized fuel prices and improved electricity reliability. Together, the measures reflect the administration’s broader strategy of combining industrial development, energy security and resource management as central pillars of Indonesia’s economic policy.
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