Centralization of Mining Area Planning for Investigation and Research Assignments in Indonesia

Mining area planning for investigation and research assignments in Indonesia is increasingly moving toward a more centralized and top-down model, particularly through the strengthened role of the Director General of Mineral and Coal.

This development is reflected not only in the allocation of authority under Indonesia’s mining regulations, but also in the mechanism for investigation and research assignments and more recent changes to the Ministry of Energy and Mineral Resources’ internal planning framework.

The implications are significant. Although provincial governments, geological institutions, and prospective assignment holders continue to have their respective roles, the determination of areas that may become the subject of investigation and research, the prioritization of areas, and the manner in which the resulting findings are incorporated into national mining area planning are increasingly controlled at the central government level.

Central Government Authority over Mining Area Planning

Indonesia’s mining regulatory framework places primary authority over mining area planning and preliminary geological activities with the Central Government.

Law No. 4 of 2009 on Mineral and Coal Mining, as amended, expressly grants the Central Government authority to conduct investigation and research throughout the Mining Legal Area (Wilayah Hukum Pertambangan). The Central Government also has the authority to determine Mining Areas (Wilayah Pertambangan or WP), Mining Business Permit Areas (Wilayah Izin Usaha Pertambangan or WIUP), and Special Mining Business Permit Areas (Wilayah Izin Usaha Pertambangan Khusus or WIUPK).

This allocation of authority establishes the basic architecture of Indonesia’s mining spatial planning system. Investigation and research are not merely preliminary technical activities; the information generated from these activities also forms part of the basis for determining future mining areas.

Government Regulation No. 25 of 2023 on Mining Areas further reinforces this structure. Under the regulation, the Minister processes the results of investigation and research into mineral and coal potential maps, which subsequently serve as the basis for preparing the WP plan.

The Minister is then required to prepare the WP plan in map form, while the determination of the WP is made by the Minister.

Accordingly, the planning process can be understood as a centrally managed chain:

investigation and research → potential mapping → WP planning → WP determination.

The more centralized the initial stages become, the greater the Central Government’s influence over the data and spatial framework underlying subsequent decisions concerning mining areas.

Provincial Licensing Authority Does Not Displace Central Planning

The increasing role of provincial governments in mining business licensing should not automatically be interpreted as a transfer of authority over national mining area planning.

Presidential Regulation No. 55 of 2022 delegates certain business licensing powers to provincial governments, including authorities relating to IUP, IPR, IUJP, and related certificates, subject to the applicable regulatory framework.

However, such delegation primarily concerns business licensing and related supervision. It does not transfer the fundamental authority to prepare and determine the WP or to determine investigation and research assignment areas that generate geological data for such planning.

This distinction is important for investors and mining companies assessing the potential of a particular area.

A provincial government may have authority over certain licensing processes, while the spatial and resource-planning framework underlying those licenses remains determined at the national level. Provincial licensing authority therefore continues to operate within the centrally determined WP framework rather than independently of it.

This reflects the principle that administrative authority at a lower level must be exercised within the framework established by higher-level regulations and national mining policy.

The Minister as the Primary Authority for Investigation and Research Assignments

Minister of Energy and Mineral Resources Regulation No. 14 of 2023 on Procedures for Investigation and Research Assignments for the Preparation of Mining Areas, Mining Business Permit Areas, and Special Mining Business Permit Areas provides a more specific mechanism for implementing this framework.

The regulation confirms that the Minister conducts investigation and research for the preparation of:

• Mining Areas (WP);
• WIUP for metallic minerals and coal, including WIUP for coal development and/or utilization; and
• WIUPK for coal development and/or utilization.

The Minister may assign such activities to specified entities, including research institutions, state-owned enterprises (BUMN), regional-owned enterprises (BUMD), and private business entities.

The involvement of non-governmental entities does not mean that planning authority has been transferred to those entities. Rather, investigation and research activities are conducted pursuant to assignments within a framework established by the Minister.

This distinction is particularly important in the context of private-sector participation. A private company may apply to conduct investigation and research, but it does not independently determine the area that will become the subject of the assignment.

The Increasing Role of the Director General in the Planning Process

Within this framework, the Director General of Mineral and Coal occupies an important position in operational and policy implementation.

Minister of Energy and Mineral Resources Regulation No. 14 of 2023 defines the Director General as the official responsible for formulating and implementing policies concerning the supervision and control of mineral and coal activities. Accordingly, the Director General serves as the principal institutional channel through which the Minister’s authority over investigation and research assignments is operationalized.

This role is particularly visible in the mechanism for investigation and research assignments for the preparation of Coal WIUPK.

The regulatory framework establishes centralized criteria for determining areas that may qualify as assignment areas. These criteria include areas where geological data remains inadequate in terms of quality or quantity, areas within WUPK where a Coal WIUPK has not yet been determined, compliance with forestry requirements where the area is located within a forest area, and consistency with spatial planning and/or zoning plans.

The Minister must also consider broader policy factors, including domestic coal demand, coal development and utilization plans, the number of existing WIUPs and WIUPKs, coal resources and reserves, and reserve security.

These considerations are not limited to the interests of a particular region. They relate to the allocation and management of mineral and coal resources at the national level and therefore support a centralized approach to determining investigation and research priorities.

Regional Proposals Remain Relevant, but Final Determination Is Made at the Central Level

A centralized approach does not eliminate the participation of regional governments.

Governors may propose areas for investigation and research assignments for the preparation of Coal WIUPK. Such proposals must be supported by the technical and spatial information required under the applicable regulations.

However, the final determination of assignment areas remains with the Minister and is carried out through a centrally established process and timetable.

This framework creates a distinction between proposal and determination.

Provincial governments may identify and propose areas based on regional conditions, but those proposals enter an assessment process controlled at the central level. The Minister retains the authority to determine which areas ultimately satisfy the criteria for investigation and research assignments.

Accordingly, the mechanism continues to provide room for regional input while maintaining national control over the allocation and prioritization of strategic mineral and coal areas.

Private Applications Are Limited to Centrally Designated Areas

The centralized nature of the framework is even more apparent in the mechanism for applying for investigation and research assignments for Coal WIUPK.

Minister of Energy and Mineral Resources Regulation No. 14 of 2023 provides that the Minister grants investigation and research assignments based on applications submitted by BUMN, BUMD, or private business entities. Importantly, such applications must relate to assignment areas previously determined by the Minister.

This means that a private company cannot simply identify an area it considers prospective and obtain an investigation and research assignment outside the centrally established planning framework.

The process can generally be understood as follows:

Minister determines assignment area → eligible business entity submits application → application is evaluated → assignment is granted.

This is a key characteristic of a top-down planning model. Private-sector initiative remains possible, but its implementation is confined to areas that have first been determined by the Central Government.

Standardized Technical and Financial Requirements

The centralized process is further reinforced through standardized application requirements.

Applications must satisfy prescribed geospatial and technical standards, including the use of the national geospatial reference system, presentation of the proposed area as a closed polygon based on latitude and longitude coordinates, and submission of coordinate lists and preliminary technical assessments.

Applicants must also satisfy administrative, technical, and financial requirements. These may include the company’s profile and ownership structure, exploration experience or support from another mining company for new entrants, qualified exploration or geological experts, a three-year investigation and research work plan and budget, audited financial statements, and bank confirmation demonstrating sufficient funding capacity.

These requirements serve two functions.

First, they establish uniform standards for entities seeking to conduct investigation and research. Second, they enable the Central Government to evaluate applicants and their proposed activities against standardized national criteria rather than different standards applied by individual provinces.

The Director General as the Practical Gatekeeper

Applications from BUMN, BUMD, and private business entities are submitted to the Minister through the Director General.

The Director General therefore occupies a central institutional position in the application and evaluation process. In practice, the Directorate General functions as the entry point for prospective assignment holders into the Ministry-level decision-making process.

This role extends beyond document receipt. The regulatory framework requires an assessment of the applicant’s administrative, technical, and financial qualifications, as well as the proposed investigation and research program.

The priority mechanism further strengthens this position. Under Minister of Energy and Mineral Resources Regulation No. 14 of 2023, priority is given to the first applicant that satisfies the applicable administrative, technical, and financial requirements.

This creates a centralized ordering mechanism for competing applicants and reduces the possibility of overlapping claims or inconsistent regional approaches to the same assignment area.

For prospective assignment holders, timing is therefore strategically important. Once an assignment area has been determined, the ability to prepare and submit a compliant application promptly may affect the applicant’s position under the applicable priority mechanism.

Recent Policy Changes Strengthen the Director General’s Planning Function

The movement toward greater centralization is also reflected in changes to the internal planning mechanism for investigation and research assignments.

Minister of Energy and Mineral Resources Decree No. 351.K/MB.01/MEM.B/2026, which amended Minister of Energy and Mineral Resources Decree No. 54.K/MB.01/MEM.B/2024 concerning guidelines for investigation and research assignments, introduced important changes to the internal planning process.

Under the previous approach, the institution responsible for geological resources played a more significant role in initiating area proposals and providing initial recommendations. The Director General would then assess those recommendations, which in practice could involve coordination with provincial governments and other relevant ministry units.

The amended framework places greater emphasis on the Director General as a proactive planner and coordinator in determining assignment areas.

The Director General may prepare and adjust assignment-area plans using WUP/WUPK maps and available mineral and coal potential maps as primary planning instruments. The institution responsible for geological resources continues to perform an important technical function, but its contribution is increasingly integrated into the Director General’s planning process, including through updates to potential mapping when requested.

This represents a meaningful institutional shift. Rather than waiting for recommendations from external parties to establish the planning agenda, the Director General’s office increasingly controls the initial formulation of assignment-area plans and subsequently integrates technical input from other institutions into a centrally managed process.

A Shift Toward a More Document-Based and Time-Bound Coordination Mechanism

These procedural changes also indicate a shift from a coordination mechanism that relies more heavily on meetings toward a more structured and document-based process.

Under the amended framework, coordination may be conducted through updates to delineation maps and formal correspondence with the relevant geological institution, accompanied by specified time limits for providing responses and making adjustments to the plan.

This approach gives the Director General greater control over the substance and timing of the planning process.

The change is significant because, in the mining sector, the availability and determination of an area may determine future exploration and investment opportunities. Accordingly, the institution controlling the timing and substance of planning has substantial practical influence over which areas can proceed to the next stage.

The more streamlined process also reduces the extent to which assignment-area planning depends on the completion of multiple cross-stakeholder meetings before the Director General can submit a proposal to the Minister.

From Investigation Data to the National Mining Area Plan

The centralization of investigation and research assignment planning has broader consequences because these activities generate information that is subsequently used in the WP planning process.

Government Regulation No. 25 of 2023 provides that the results of investigation and research are processed into mineral and coal potential maps. These maps then form the basis for preparing the WP plan.

The relationship can therefore be viewed as a single planning chain:

assignment-area planning → investigation and research → potential mapping → WP plan → WP determination.

If the Director General exercises greater control at the initial stage, the office also has greater influence over the information and data that ultimately feed into the national WP framework.

The determination of the WP remains the authority of the Minister. Provincial governments and other institutions continue to play roles at subsequent stages, including by providing input and participating in coordination.

Nevertheless, the Central Government remains in a highly influential position because the information entering the subsequent stages is generated through an investigation and research framework that is centrally managed.

Implications for Mining Companies and Investors

The increasing centralization of mining area planning has practical implications for companies and investors seeking to identify or pursue opportunities in Indonesia’s mining sector.

First, provincial government support for an area should not be treated as equivalent to Central Government determination. An investor may identify an area with geological potential or obtain support from a regional government, but the central planning and assignment framework must still be assessed.

Second, monitoring Central Government policy is becoming increasingly important. Changes to assignment-area plans, potential maps, and ministerial decisions may affect the availability and strategic value of an area.

Third, prospective applicants should ensure that their corporate, technical, financial, and exploration qualifications are ready before an assignment area becomes available. Given the priority mechanism for applicants that satisfy the requirements, such readiness may have direct commercial significance.

Finally, investors should distinguish at least three separate matters: whether an area has been identified as having mineral or coal potential, whether the area has been incorporated into the relevant WP framework, and whether the area has been determined as an investigation and research assignment area. These three stages do not necessarily create the same legal or commercial position.

Key Considerations

The applicable framework demonstrates a clear movement toward greater centralization of mining area planning, particularly at the investigation and research assignment stage.

For companies and investors, the key considerations include:

1. Central authority remains decisive. The Central Government, through the Minister, retains primary authority over investigation and research and the determination of WP, WIUP, and WIUPK.
2. The Director General’s role is increasingly central. The Director General serves as the principal channel for applications, evaluation, planning, and coordination relating to investigation and research assignments.
3. Provincial participation remains relevant but is not determinative. Governors may propose areas, but final determination remains within a centrally controlled process.
4. Private-sector initiative operates within predetermined areas. BUMN, BUMD, and private business entities may apply for assignments, but applications must relate to areas previously determined by the Minister.
5. Central planning influences subsequent mining opportunities. Investigation and research results contribute to potential mapping and ultimately to the national WP planning process.
6. Recent policy changes reinforce the top-down model. The amended internal framework gives the Director General a more proactive role in preparing and adjusting assignment-area plans, while other institutions increasingly provide technical and regional input within a centrally managed process.

Overall, the applicable framework supports the characterization that mining area planning in Indonesia is becoming increasingly centralized and top-down, particularly at the investigation and research stage. The Director General of Mineral and Coal has become an increasingly important institutional actor in translating national mining policy into specific assignment areas, evaluating prospective assignment holders, and integrating geological, spatial, and economic considerations before proposals are submitted to the Minister.

For mining companies and investors, this means that understanding mining opportunities in Indonesia requires more than assessing geological potential or obtaining support from regional governments. The analysis should also cover the central planning architecture, the Minister’s determination process, the Director General’s planning priorities, and the regulatory pathway through which an area moves from resource potential to an investigation and research assignment area and ultimately to a formally determined mining area.

How TAMA Global Mobility Can Assist

• Mining Regulatory Assessment, assessing the regulatory framework applicable to mining-related activities and identifying the relevant central and sectoral authorities.
• Mining Area & Assignment Review, reviewing WP, WUP/WUPK, potential maps, and relevant investigation and research assignment areas in connection with an investment plan or project.
• Regulatory & Institutional Mapping, identifying the respective roles of the Minister, Director General, provincial governments, geological institutions, and other relevant authorities.
• Investigation & Research Assignment Advisory, assisting prospective BUMN, BUMD, and private business entities in assessing the applicable administrative, technical, and financial requirements for an assignment.
• Mining Investment Structuring, advising foreign investors and corporate groups on regulatory considerations when assessing mining investment opportunities in Indonesia.

TAMA Global Mobility assists investors and companies in navigating Indonesia’s regulatory landscape through a structured approach to corporate structuring, licensing, regulatory compliance, and market entry.

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