Indonesia's Ministry of Energy and Mineral Resources (ESDM) has issued new rules allowing coal and mineral sales below government-set lowest prices of HPB and HPM, Kontan reported on August 24.

However, tax and royalty payments will still be calculated based on the two official benchmarks, according to Decree No. 268.K/MB.01/MEM.B/2025, signed on August 8, which revoked a previous regulation that required mining companies to sell coal and metal minerals at or above the price limits.

This policy is said to be a further step by the government to strengthen mining governance and the focus is on price transparency and certainty of the basis for calculating taxes and royalties.

Acting Executive Director of the Indonesian Coal Mining Association (APBI), Gita Mahyarani, expected this regulation to bring insignificant changes for businesses. "This regulation simply clarifies that even if coal sales are below the benchmark price, payment obligations are still calculated based on the HPB," Mahyarani told Kontan on August 24.

Mahyarani said the new regulation would not significantly impact existing contracts of either domestic smelters or foreign buyers. Contracts would remain in effect, adhering to the previously agreed-upon pricing mechanism.

She, however, warned that there is additional pressure on mining businesses when global prices weaken, as royalty calculations using the historical HPB can be higher than actual market prices, adding burden to miners," explained Mahyarani.

In the appendix to the decree, ESDM details the pricing formula for various types of metal minerals, including coal with various calorie specifications, nickel, cobalt, copper, gold, and bauxite, yet it has yet to issue further guidance on how the new provisions will be enforced.