Indonesia's Mining-Services Affiliate Rule: Kepmen ESDM 365/2026 Explained for Investors

Indonesia's Minister of Energy and Mineral Resources, Bahlil Lahadalia, signed Keputusan Menteri ESDM No. 365.K/MB.01/MEM.B/2026 on 18 September 2026. The decree is the technical guideline for approving the use of a subsidiary and/or affiliate in the mineral and coal mining-services business, and it took effect on the date it was stipulated. It replaces a directorate-general regulation from 2010. For an investor holding an IUP or IUPK whose group also owns the contractor that moves its ore, this is the document to read first.

What the decree does

The decree works through twelve operative clauses (*diktum*). Two of them carry the substance.

• Hire an IUJP holder, and prefer the neighbourhood. An IUP or IUPK holder that uses mining services in its operations must use a company holding a *Izin Usaha Jasa Pertambangan* (IUJP — a mining-services business licence), and must give priority to mining-services companies located in the regency or city around its licence area (Diktum Kesatu).
• No captive contractor without the Minister's approval. An IUP or IUPK holder is prohibited from involving its subsidiaries and/or affiliates in mineral and coal mining services without the Minister's approval (Diktum Kedua).

The stated purpose, as reported by CNBC Indonesia, is to circulate more of the value of a mine in the regencies around it and to curb monopoly of services work by the licence holder's own group.

What counts as an "affiliate"

Diktum Ketiga defines the relationship that triggers the prohibition. It is not limited to a parent-and-subsidiary chain drawn on an org chart; it turns on ownership and on ultimate control:

The second test is the wide one. A group that runs its mining-services arm through a separate but commonly-controlled vehicle — a familiar structure for integrated coal and nickel groups — is inside the definition even where there is no direct shareholding line.

The only route through: a government assignment

Diktum Keempat allows the approval to be given only to an IUP or IUPK holder that is carrying out an assignment by the Government. Three categories qualify:

1. Carrying out a national strategic project (*proyek strategis nasional*);
2. Building mineral processing and/or refining facilities, or coal development and/or utilisation activities; and/or
3. Supplying minerals or coal for domestic needs.

Those three doors are the whole exemption. It is worth reading them precisely: the test is not the size of the affiliate's stake or the number of years it has worked the pit, but whether the licence holder is executing a government assignment. The application itself is made to the Minister (Diktum Kelima).

The approval clock and its limits

The mechanics are short and documentary, and an investor can plan around them:

• The Minister decides within 14 working days of receiving a complete and correct application (Diktum Keenam).
• The approval is granted according to the field and sub-field of the subsidiary's or affiliate's IUJP, and lasts until that IUJP expires (Diktum Ketujuh) — it is tied to the services licence, not granted in perpetuity.
• For an IUP issued by a governor under the governor's authority, the application goes to the governor (Diktum Kedelapan).
• Administrative errors or errors of evaluation in the approval process can be corrected by the Minister or the governor (Diktum Kesembilan).

Who else is bound

Diktum Kesepuluh applies the decree *mutatis mutandis* to three older generations of title: IUPK holders operating as a continuation of a contract or agreement, Contract of Work (*Kontrak Karya*) holders, and Coal Contract of Work (*Perjanjian Karya Pengusahaan Pertambangan Batubara*) holders. The pre-2009 contract generation is therefore not carved out of the rule.

Diktum Kesebelas revokes the Director General of Mineral, Coal and Geothermal Regulation No. 376.K/30/DJB/2010 on the procedure and requirements for approving the participation of subsidiaries and/or affiliates in mining-services work. The new instrument replaces that 2010 guidance rather than sitting alongside it.

Where the decree sits in the mining law

The legal basis it cites is a useful map of the current framework. The decree is issued under the Mining Law, UU No. 4 of 2009, as last amended by UU No. 2 of 2025 — the fourth amendment. The implementing regulation is Government Regulation No. 96 of 2021, as last amended by PP No. 39 of 2025 — its second amendment. Presidential Regulation No. 55 of 2022 delegates mining business licensing, and two ministerial regulations sit under it: Permen ESDM No. 7 of 2020 as amended by Permen ESDM No. 16 of 2021, and Permen ESDM No. 7 of 2026 on risk-based business-activity standards.

An investor reading only the older 2010 services guidance would be reading a regime that this decree has now revoked.

The market's first reading

The decree reached the market on the morning of 29 September 2026, and coal names opened weaker. According to RTI Business data cited by detikFinance at 10:00 WIB that day:

Those are session prices at one moment, not forecasts. The analysts quoted did not attribute the whole move to the decree. Nafan Aji Gusta, a senior market analyst at Mirae Asset Sekuritas, told detikcom:

"Pasar kemungkinan sedang melakukan re-rating terhadap potensi dampak regulasi tersebut terhadap pendapatan dan margin jasa pertambangan, terutama pada emiten yang struktur bisnisnya cukup terintegrasi." — Nafan Aji Gusta, Mirae Asset Sekuritas, to detikcom, 29 September 2026. Translation from Indonesian is Teramine's.

In plain terms: the market was repricing the services margin that some issuers earn inside their own group, and the re-rating lands hardest on the most vertically integrated names.

What it means for a foreign-held licence

Five consequences follow from the text above.

• Your group's structure is now a licensing question. If your Indonesian licence-holding vehicle and your services contractor share a beneficial owner, the arrangement needs the Minister's approval. This is the point at which a corporate structure that was purely a tax or holding matter becomes a permit matter.
• The default is the local IUJP. Absent an approval, the licence holder must use an IUJP holder and prioritise firms in the regency or city around its licence area. For an operator that has relied on a single group contractor, that is a procurement change, not a filing change.
• The exemption is for assignments, not for conglomerates. Building a smelter, running a national strategic project, or supplying the domestic market are the only doors. A group that does none of those three has no route to approval for an affiliate contractor.
• The clock is short, the validity is not open-ended. A complete application should draw a decision within 14 working days; but an approval runs only until the affiliate's IUJP lapses, so the permit maintenance cycle continues.
• The old contracts are included. Contract of Work and PKP2B holders are brought in by Diktum Kesepuluh, so the rule is not confined to the newest licences.

Catatan Teramine

This section is Teramine's editorial assessment. It is not a provision of the decree, not a quotation from a source, and not legal advice.

The interesting design choice is what the state chose to regulate. It did not ban integrated groups outright; it made integration conditional on a government assignment and on a ministerial approval, and it defined affiliation by ultimate beneficial ownership rather than by corporate form. That is a narrower instrument than a flat prohibition but a harder one to sidestep, because the test follows control rather than the paperwork.

The local-priority clause is the part most likely to bite in practice. Diktum Kesatu is not merely a preference in a policy preamble; it directs the licence holder to prioritise services companies in the regencies around the licence area, and that is a genuine change in how contracts are awarded. How strictly it is read, and how the Minister treats the three assignment categories in Diktum Keempat, will decide whether the economic effect is large or largely symbolic. The smelter and domestic-supply doors are wide enough that many large, vertically integrated groups may be able to walk through them; whether they can is a question about approvals granted, not about clauses written.

We handle the licence and approval work behind an Indonesian mining project — IUP and IUPK applications, RKAB, and the operating documents a mine must hold — through [mining permit services](/en/layanan-izin). Mining opportunities offered for take over, joint venture and joint operation, each with its commodity, location and scheme stated, are listed on the [mining marketplace](/en/marketplace).

Related reading on this site: [Foreign Ownership in Indonesian Mining](/en/news/foreign-ownership-indonesian-mining) for the divestment clock that runs with a foreign-held IUP; [IUP vs IUPK](/en/news/iup-vs-iupk) for how the two industrial licences differ; [Indonesia Mining Investment Climate](/en/news/indonesia-mining-investment-climate) for the wider risk picture; and [Mine Closure in Indonesia](/en/news/mine-closure-in-indonesia) for the post-mining obligations that sit alongside the operating rules.

What this article does not establish

• Any official statement from the Ministry about the decree. We read the decree itself on JDIH ESDM and the reporting around it; we did not find or read a ministerial press release announcing it.
• How many approval applications exist, or how the Minister has applied the three assignment categories in Diktum Keempat. No source read for this article states either, and no figure has been estimated here.
• Which licence holders own a services affiliate, or the value of the services work moved within groups. No figures were read.
• The financial impact on any issuer. The share prices above are one session's prices at 10:00 WIB on 29 September 2026, as reported by detikFinance, not a projection.
• The full text of the revoked 2010 regulation. Only its number, title and revocation are established by the sources read.

Sources

• Keputusan Menteri Energi dan Sumber Daya Mineral No. 365.K/MB.01/MEM.B/2026 — *Pedoman Teknis Pelaksanaan Persetujuan Penggunaan Anak Perusahaan dan/atau Afiliasi Dalam Bidang Usaha Jasa Pertambangan Mineral dan Batubara*, stipulated in Jakarta on 18 September 2026 and signed by Minister Bahlil Lahadalia, published by JDIH Kementerian ESDM. Read in full (five pages). Used for: the twelve operative *diktum* — the duty to use an IUJP holder and prioritise the regency/city around the licence area (Kesatu); the prohibition on involving subsidiaries and/or affiliates without the Minister's approval (Kedua); the affiliation tests of direct shareholding and shared beneficial owner (Ketiga); the exemption limited to government assignments, covering national strategic projects, smelter/processing construction or coal development and utilisation, and the supply of coal or minerals for domestic needs (Keempat); the application to the Minister (Kelima); the 14-working-day decision period (Keenam); approval tied to the field and sub-field of the affiliate's IUJP and valid to its expiry (Ketujuh); applications to the governor for governor-issued IUPs (Kedelapan); correction of administrative or evaluation errors (Kesembilan); application *mutatis mutandis* to IUPK-as-continuation, Contract of Work and PKP2B holders (Kesepuluh); the revocation of Director General of Mineral, Coal and Geothermal Regulation No. 376.K/30/DJB/2010 (Kesebelas); and entry into force on the date of stipulation (Keduabelas). Also used for the legal basis cited in the preamble, including UU No. 4 of 2009 as last amended by UU No. 2 of 2025, and PP No. 96 of 2021 as last amended by PP No. 39 of 2025.
• CNBC Indonesia — Firda Dwi Muliawati, "Perusahaan Tambang Tak Boleh Pakai Kontraktor Anak Usaha, Kecuali..", 29 September 2026, 10:30 WIB. Used for the ministry's stated purpose of spurring the local economy around mine sites, the exemption categories, the 14-working-day decision, and the revocation of the 2010 regulation.
• detikFinance — Andi Hidayat, "Saham AADI, ADRO, hingga PTBA Loyo Usai Anak Usaha Dilarang Garap Tambang", 29 September 2026, 11:37 WIB. Used for the RTI Business price data at 10:00 WIB on 29 September 2026 and the quotation from Nafan Aji Gusta of Mirae Asset Sekuritas.