Indonesian nickel industry is once again dealing with challenges after the government decided to reduce the mineral and coal production period under the government-approved Work Plans and Budgets (RKAB) from the previously three years, to one year.

"The RKAB regulation has been revised again to one year. We certainly welcome it, but there are planning difficulties," Jérôme Baudelet, CEO of mining company Eramet Indonesia, said during the Eramet Journalist Class event on Monday, August 25, 2025.

When the RKAB is issued for a three-year production period, companies can plan mining development for the long term. Therefore, entrepreneurs welcomed the government's three-year RKAB regulation. However, when the period was returned back to one year, business players are worried that terms and conditions on the following year would not align with the original plan.

"There are concerns that next year we will not get the government’s approval sa we have originally planned," Jérôme said.

He also highlighted other challenges such as increasing royalties for mineral and coal mining and the phenomenon of overexpansion in the Indonesian nickel industry. He believes that the royalty rate increase is a good policy to increase state revenue, but it was implemented at the wrong time.

"The tariff increase was implemented when the industry was in decline," he said.

This relates to the Ministry of Energy and Mineral Resources (ESDM) requesting mining companies to submit new mining Work Plans and Budgets (RKAB) by October 2025. This request stemmed from an agreement between ESDM Minister Bahlil Lahadalia and Energy and Mineral Resources, Environment, and Investment Commission XII of the House of Representatives (DPR), regarding the change in the RKAB approval system from three years to one year.

In its implementation, the royalty rate adjustment drew protests from business circles, particularly nickel players. The latest regulation introduces significant increases. For nickel ore commodities, the previously single rate of 10 percent per ton of the price has now become a multi-tariff rate ranging from 14 to 19 percent of the reference mineral price (HMA) in accordance with Presidential Regulation (PP) No. 19/2025.

President Prabowo Subianto has signed PP No. 19/2025, which contains adjustments to the types and rates of non-tax state revenue (PNBP) in the mineral and coal sector, which will come into effect starting from April 26, 2026.