Indonesia's energy and mineral resources ministry (ESDM) has revised the validity period for work plans and budgets (RKAB) back to one year in its updated procedures for preparing, submitting and approval of work plans and budgets published last week.
The ESDM has also asked holders of general mining licences (IUP) and single-commodity mining licences (IUPK) to re-apply for RKAB for 2026 and 2027, effectively cancelling their previously approved RKABs for the next two years. But RKABs approved for 2025 will remain unchanged.
Mining firms are now required to apply for RKABs for the following year between 1 October and 15 November, according to the updated procedures.
The revised RKAB validity period will enable the government to better control production and sales of minerals and coals and in turn will help to maintain state revenues despite lower mineral and coal prices, the ministry said.
The ESDM extended the length of RKAB to three years from one year in 2023. The extension aimed to create a better investment climate allowing companies to draw up long-term operation plans and budgets, it said.
The revision of the RKAB validity period back to one year has had limited impact on nickel prices so far, with class 1 metal cash prices on the London Metal Exchange largely rangebound between $15,000-15,200/t since 30 September.
But this change, along with the flurry of policy and regulations changes since the beginning of this year, does not promote a stable operation environment and could harm business climate and investment interests, several market participants said.
