The Government has reaffirmed that mining activities, at both the exploration and production operation stages, may not be carried out without approval of the Work Plan and Budget (Rencana Kerja dan Anggaran Biaya or “RKAB”), as well as the fulfilment of other relevant licensing requirements, through Circular Letter of the Director General of Mineral and Coal No. 3.E/HK.03/DJB/2026 dated 22 April 2026 (the “Circular Letter”).
The Circular Letter emphasises that holders of Mining Business Licences (IUP), Special Mining Business Licences (IUPK), IUPK as a Continuation of Contracts/ Agreements, Contracts of Work (KK), and Coal Contracts of Work (PKP2B) at the exploration stage that fail to submit the exploration RKAB, have not yet obtained approval of the exploration RKAB, or whose application for approval of the exploration RKAB has been rejected, are prohibited from carrying out field activities in the form of general investigation and exploration.
Meanwhile, more extensive restrictions apply to holders of IUP, IUPK, IUPK as a Continuation of Contracts/Agreements, KK, and PKP2B at the production operation stage. Such holders are prohibited from conducting construction, mining, processing and/or refining, development and/or utilisation, transportation and sales activities, including advanced exploration, where the production operation RKAB has not been submitted, has not yet been approved, or its approval application has been rejected, or where the holder has obtained approval of the production operation RKAB but has not yet secured the required approval for the borrow-use of forest areas, completed the settlement of land rights, and/or obtained approval for the utilisation of marine space in accordance with applicable laws and regulations. The only exceptions are maintenance and repair activities, as well as environmental monitoring and management.
The Circular Letter also clarifies that holders of IUP, IUPK, IUPK as a Continuation of Contracts/Agreements, KK, and PKP2B at the production operation stage whose approved RKAB stipulates a production volume of zero may continue to carry out mining business activities, provided that such activities are conducted in accordance with the approved production operation RKAB. In addition, for the implementation of the 2026 RKAB, holders at the production operation stage that had obtained approval of the 2026 RKAB as part of a three-year RKAB period remain required to obtain an adjustment approval for the 2026 RKAB by 31 March 2026. In the absence of such adjustment approval, those holders remain prohibited from carrying out physical field activities at the production operation stage, notwithstanding that they had previously obtained a multi-year RKAB approval.
Through the Circular Letter, the Government has further reinforced RKAB approval as a core compliance requirement in mineral and coal mining activities. Holders proven to have carried out the restricted activities referred to in the Circular Letter will be subject to administrative sanctions up to the revocation of IUP, IUPK, or IUPK as a Continuation of Contracts/Agreements in accordance with applicable laws and regulations, or the termination of the relevant contract or agreement.