Indonesia opens talks over Chinese mining concerns

Energy and Mineral Resources Minister Bahlil Lahadalia said the government remains open to dialogue after Chinese investors raised concerns over Indonesia’s mining and nickel sector policies in a letter sent to President Prabowo Subianto.

The letter, submitted by the China Chamber of Commerce in Indonesia on behalf of Chinese-invested companies, warned that recent regulations and law enforcement measures were creating uncertainty and hurting investor confidence in Indonesia’s nickel industry.

Bahlil said he had discussed several issues, including revisions to Indonesia’s nickel benchmark pricing formula, with China’s ambassador.

 “The ambassador has already spoken with me, and I provided a proper explanation,” Bahlil told reporters on Wednesday.

The chamber cited concerns over higher taxes and mineral royalties, tighter foreign exchange rules, reductions in nickel ore mining quotas, stricter forestry enforcement, and tighter work visa requirements for foreign workers.

Chinese investors also criticized revisions to Indonesia’s benchmark mineral price formula, which now includes cobalt, iron, and other associated minerals in nickel ore pricing calculations.

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According to the chamber, some nickel mining quotas were cut by more than 70%, reducing total nickel ore production by around 30 million tons this year.

The group said the policy changes had increased production costs and operational losses across Indonesia’s nickel supply chain, which supports the electric vehicle and stainless steel industries.

The chamber warned the measures could affect existing projects, future investment, exports, and employment linked to more than 400,000 workers in Indonesia’s nickel sector.

Bahlil said the government had agreed to temporarily postpone planned export tax and royalty increases for copper, tin, nickel, gold, and silver while officials seek a more balanced policy framework.

 “We agreed to temporarily postpone it while we look for a good formula, while still prioritizing the interests of the state and businesses,” he said.

Despite the concerns, the chamber reaffirmed its commitment to long-term cooperation with Indonesia and urged the government to maintain a transparent and predictable investment environment.

Editing by Alexander Ginting