The Indonesian Ministry of Energy and Mineral Resources (ESDM) has finally responded to complaints from nickel miners regarding the high administrative fines imposed by the Forest Area Monitoring Task Force (PKH Task Force).
It is reported that fines for violations related to nickel mining activities in forest areas can reach up to 6.5 billion Indonesian Rupiah per hectare, posing a significant burden on business operators, especially small-scale miners.
Tri Winarno, Director General of Minerals and Coal at ESDM, emphasized that the fine amounts are not determined unilaterally or arbitrarily. He added that the calculation of fines takes into account the economic value of the mining area as well as the potential profit per hectare of nickel mining land. The calculation method involves dividing the profit by the total cleared area to derive the profit per hectare.
He further explained that, compared to other mineral commodities, nickel has significantly higher added value and profit margins. This is why the administrative fines for forest-related violations in nickel mining are set at the highest level.
This statement also addresses the objections raised by some nickel mining business owners, who felt they were being treated unfairly compared to other mining sectors. However, this claim has been refuted. The ESDM stated that the approach taken is measured, and the sanctions correspond to the economic potential generated by the mining activities.
Nevertheless, complaints from miners, particularly small-scale nickel operators, deserve attention. They argue that the high fines may exacerbate financial pressure and disrupt the sustainable development of their businesses, especially given the volatility of nickel prices and rising operational costs.
Late last year, two nickel industry business associations, the Indonesian Nickel Miners Association (APNI) and the Indonesian Nickel Industry Forum (FINI), held a joint meeting regarding the fine policy. At the meeting, business owners reiterated their firm support for equitable enforcement across all operators.
APNI and FINI noted inconsistencies in field inspections and fine impositions. Some companies complained that payments made, including ongoing installments, were not properly recorded, and some were even fined for activities outside the scope of their IUP (Mining Business License).
On the same occasion, FINI Chairman Arif Perdanakusumah added that the input from nickel mining business owners would be compiled into a formal letter to be submitted to the government. One of the key concerns is their request for the government to clarify the calculation method for mining violation fines, including why nickel mining is subject to higher fines compared to other minerals.
APNI also highlighted the lack of uniformity in regulation enforcement, noting that while relevant standards such as presidential decrees and ministerial regulations already exist, their application in practice remains inconsistent. APNI is actively working to promote the establishment of a unified Standard Operating Procedure (SOP) and a standardized calculation formula.
Written by Cora Ji, jiruyan@mysteel.com
