Private Companies Allowed to Bid for Mining Concessions in Indonesia

Updated on Friday 23rd March 2018

Indonesia has very strict laws related to certain industries and the participation of foreign investors and companies in their exploitation. One of these industries is mining, for which special authorizations are required. Indonesia is a rich country from the natural resources point of view, which is why the government decided to allow private companies owned by foreign investors to bid for mining concessions. Our company formation agents in Indonesia can offer information on the legislation related to mining in this country.

The Indonesian government issued new regulations for mining concessions

The government through the Ministry for Energy and Mineral Resources issued Regulation No. 11/2018 through which private companies owned by foreign enterprisers are granted mining concessions for areas of more than 500 hectares. At the same time, smaller parcels will be given for exploitation to state companies.

In order to exploit the chosen areas, Indonesian companies will auction the mining surfaces which were previously operated by other holders of mining permits, while in the case of areas smaller than 500 ha, these will be issued exploitation permits based on tenders. Under the regulations of 2018, cooperatives and individuals will also be allowed to participate in auctions, respectively tenders.

Our Indonesia company incorporation consultants can help foreign investors who want to open companies in the mineral resources sector in this country.

Companies to be allowed to extract coal and metal mineral in Indonesia

Regulation No. 11/2018 provides for the exploitation of coal and metal mineral mines in Indonesia. The companies which will be given the mining permits for areas expanding over more than 500 ha can be state-owned businesses, private companies registered by nationals, but also foreign companies with operations here will be allowed to participate in the auctions.

The mining sector is one of the most important economic sectors in Indonesia, most of the products exploited here being exported. Indonesia is one of the most important coal exporters in the world, 9% of the total production of coal being shipped all over the world.

For assistance in registering a company in the mining industry in Indonesia, please contact our local consultants.