By Calvin Purba
The House of Representatives Commission XII (DPR) has proposed reverting the submission scheme for the Work Plan and Budget (RKAB) in the mineral and coal sector from the current three-year term back to an annual submission.
Vice Chairman of Commission XII, Bambang Hariyadi, explained that since the implementation of the three-year RKAB scheme, there has been a mismatch between production volumes and market absorption, leading to a significant decline in commodity prices.
“When this system was implemented, supply became excessive. For example, in the bauxite sector, there is a large gap between the RKAB (production quota) and the absorption capacity of the (alumina) industry. The imbalance is extraordinary. If I’m not mistaken, the RKAB quota for bauxite was around 45 million tons, while industry absorption was only about 20 million tons. This oversupply was disproportionate and ultimately caused prices to fall,” he said during a working meeting of Commission XII with Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia on Wednesday (July 2, 2025).
Given this, Bambang urged the Minister to reconsider and approve the proposal to return the RKAB submission to an annual basis.
“In light of this, we, Commission XII, request the Minister of ESDM to agree to revert the RKAB submission back to an annual system,” he added.
Minister Bahlil Lahadalia responded positively, agreeing with Bambang on the imbalance between production and market absorption, especially in the coal sector.
“I’m glad we share the same perspective on managing mining governance, particularly regarding supply and demand,” Bahlil said during the meeting.
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He noted that global coal prices are currently falling, partly due to overproduction in Indonesia.
“Indonesia produces 600-700 million tons of export coal annually… Due to the excessive production driven by the three-year RKAB system, which I consider overproduction, we have lost control over balancing coal production and global demand. The result? Prices drop,” Bahlil explained.
This issue is not limited to coal, as Bahlil also mentioned similar imbalances in nickel and bauxite markets.
Therefore, Bahlil agreed that the three-year RKAB policy should be evaluated and reverted to an annual submission.
“Regarding RKAB, some might think reverting to annual submissions is backtracking. But since this has become a political decision, we are implementing it. Starting today, with ‘Bismillahirrahmanirrahim,’ we accept the proposal from Commission XII to make RKAB submissions annual,” he affirmed.
Currently, miners in Indonesia must submit an RKAB to the ESDM Ministry for approval before engaging in production and sales activities. Previously, the RKAB was valid for one year, but in 2023, the Ministry extended the validity to three years.
The three-year RKAB rule is stipulated in Minister of ESDM Regulation No. 10 of 2023, which partially revoked Ministerial Regulation No. 7 of 2020, governing Procedures for Granting Mining Areas, Licensing, and Reporting for Mineral and Coal Mining Activities.
Editing by Reiner Simanjuntak
