MEMR Regulation No. 18 of 2025 Establishes the Bid Mechanism and Priority Allocation for Religious Organizations

Introduction

On 18 November 2025, the Ministry of Energy and Mineral Resources promulgated Minister of Energy and Mineral Resources Regulation No. 18 of 2025 (“MEMR Regulation 18/2025”) which implements Government Regulation No. 39 of 2025, the second amendment to Government Regulation No. 96 of 2021 on the Implementation of Mineral and Coal Mining Activities (“GR 96/2021”). This Regulation provides comprehensive technical guidelines on the procedures for granting Mining Permit Areas (WIUP) and Special Mining Permit Areas (WIUPK), whether through bid or priority allocation, including priority allocation for certain entities such as religious mass organizations and educational-supporting entities. Furthermore, MEMR Regulation 18/2025 sets out the procedures for permit extension, area reduction, and structuring of small-scale mining through standardized territorial management documents, thereby strengthening legal certainty and the effectiveness of mining administration at both central and regional levels.

 

Key Provisions

Articles 2 – 18: Mechanism for Granting WIUP for Metallic Minerals and Coal Through Bids

WIUP for Metallic Minerals and Coal are obtained through bids with participant classifications based on area size, as follows:

1. For areas ≤ 500 hectares, bids may only be participated in by local Region-Owned Companies (BUMD), local private national entities (micro/small criteria), and Cooperatives.
2. For areas > 500 hectares, bids are open to State-Owned Entities (BUMN), BUMD, private national entities (medium/large), Foreign Investment Companies (PMA), and Cooperatives. 
3. Bid requirements include administrative, technical, and financial capacity aspects, including the obligation to place a bid commitment guarantee amounting to 10% of the value of data and information usage fees. The bid winner is determined based on the highest price offer at the qualification stage.

Articles 19 – 28: Granting Priority WIUP

WIUP for Metallic Minerals or Coal may be granted on a priority basis without bid to specific entities. Priority applicant criteria include:

1. Cooperatives and MSMEs for areas up to 2,500 hectares.
2. Entities owned by Religious Organizations for areas up to 25,000 hectares (metallic minerals) or 15,000 hectares (coal). Their specific requirement is that at least 67% of shares must be owned by the Religious Organization, and such ownership must not be diluted.
3. Educational-supporting Entities (must have a cooperation agreement), which must contribute at least 60% of net profit to expanding access to education.
4. SOEs/Private Entities for downstreaming purposes.

Articles 34 – 37: Granting WIUP for Non-Metallic Minerals and Rocks

For non-metallic mineral commodities (such as sand and stone), areas are not granted through bid but through an Area Application mechanism. The principle applied is first come first served or priority for the earliest applicant who fulfils the requirements. Authority is divided between: The Minister (cross-provincial areas or marine areas > 12 nautical miles); and Governors: areas within a province or marine areas up to 12 nautical miles.

Articles 38 – 51: Granting WIUPK on a Priority Basis for Religious Organizations and Education

WIUPK may also be granted on a priority basis to Entities owned by Religious Organizations. However, strict requirements apply, includes minimum 67% shareholding by the Religious Organization; and prohibition on transferring or encumbering the IUPK to other parties. Submission through the OSS system. In addition, the fulfilment of administrative, technical, and financial commitment requirements must be verified.

Articles 52 – 55: Priority Offering of WIUPK to SOEs and Regional SOEs

The priority offering mechanism for WIUPK for Metallic Minerals/Coal to SOEs and Regional SOEs is conducted simultaneously before the areas are bided to the private sector.
If more than one party (SOE or Regional SOE) expresses interest, the Minister facilitates the establishment of a joint-venture company. Combined shareholding of SOEs and/or Regional SOEs in the joint-venture must be at least 75%. If SOEs/Regional SOEs are not interested or fail to reach agreement, the area may then be bided to private entities.

Articles 62 – 64: Extension of Activity Stages

Permit holders who have not completed exploration may apply for an extension no later than 45 days before the permit expires. Extensions are granted only if certain criteria are met, such as fulfilment of nontax revenue obligations or possession of actual equipment in the field.
If no exploration progress is reported for three consecutive reporting periods, the permit may be revoked.

Articles 65 – 67: Area Reduction and Territorial Structuring

The Minister has the authority to reduce areas if overlap occurs, coordinates shift, or areas are not optimally utilized. Areas resulting from reduction or permit revocation will be temporarily managed by the Ministry’s Technical Implementing Unit (UPT) before being transferred to a new entity, with the UPT entitled to hold at least 60% shares in the subsequent managing entity.

Articles 73 – 77: Management of Small-Scale Mining Areas (WPR)

Governors propose WPR based on conditions that small-scale mining activities already exist and that commodities have primary reserves at a maximum depth of 100 meters.
Small-Scale Mining Permits (IPR) are granted to Individuals (maximum 5 hectares) or Cooperatives (maximum 10 hectares). IPR holders must deposit a reclamation guarantee amounting to 10% of each mineral sale.

 

Sanction Provisions

A. Blacklist Sanctions and Service Suspension

The following parties are subject to blacklisting and denial of territorial permitting services for five (5) years:

1. Bid participants who pass pre-qualification but do not submit bids, or bid winners who withdraw, including their affiliates. [Article 17(1)]
2. Priority WIUP applicants (Cooperatives/MSMEs/Private/Religious Entities) deemed to have withdrawn. [Article 32(1)]
3. Priority WIUPK applicants deemed to have withdrawn. [Article 50(1)]

B. Sanctions Related to Exploration Stage Activities

Sanctions apply to permit holders who fail to comply with reporting or conduct exploration irregularly.

1. Administrative Sanction: If IUP/IUPK holders do not submit regular exploration activity reports (every 3 months). [Article 62(3)]
2. Revocation of Exploration Permit: If reports are submitted but no exploration progress occurs for three consecutive reporting periods. [Article 62(4)]

C. Permit Revocation Sanctions (Serious Violations)

Article 65(4) establishes seven grounds for permit revocation:

1. Not possessing/performing activities in accordance with the permit.
2. Not fulfilling nontax revenue obligations.
3. Conducting mining without RKAB approval.
4. Misusing licensing documents.
5. Mining outside the permitted area (WIUP/WIUPK).
6. Not fulfilling environmental obligations.
7. Not fulfilling reclamation and reclamation guarantee obligations.

Article 65(7) provides that revocation does not eliminate outstanding obligations or applicable criminal provisions.

D. Sanctions for Cross-Commodity Overlap

Article 72(1) provides that a Non-Metallic Mineral/Rock IUP overlapping with a Metallic Mineral/Coal IUP, without approval from the initial permit holder, may be revoked or its area reduced.

 

Transitional Provisions (Article 80)

WIUP and WIUPK that were determined before MEMR Regulation 18/2025 was enacted may continue their granting process through bid or priority mechanisms under the new procedures in MEMR Regulation 18/2025. Furthermore, applications for WPR management documents under process will be evaluated according to the new provisions in MEMR Regulation 18/2025.

 

Closing

MEMR Regulation 18/2025 creates significant implications for Indonesia’s mining landscape, particularly with the introduction of priority access for Religious Organizations and the Education sector to operate large-scale mines. Businesses must pay close attention to these shifts, especially concerning potential partnerships with SOEs/Regional SOEs in mandatory joint-venture schemes (75%) for WIUPK. This Regulation provides clearer legality for small-scale entrepreneurs and small-scale mining, although with stricter environmental obligations (10% reclamation guarantee). Businesses are encouraged to immediately review the technical annexes of this Regulation to prepare administrative and financial documents in accordance with the latest OSS System standards.