Policy Update on the Management of State-Owned Assets in the Coal Mining Sector under Regulation of the Minister of Finance Number 77 of 2025

Introduction

The Ministry of Finance issued Regulation of the Minister of Finance of the Republic of Indonesia Number 77 of 2025 on the Management of State-Owned Assets Derived from Coal Mining Concession Work Agreements/Coal Contracts of Work (“PMK 77/2025”), effective as of November 19, 2025. This regulation updates the governance of State-Owned Assets (BMN) derived from Coal Contracts of Work (PKP2B), aligns relevant provisions with recent legislative changes in the mineral and coal mining sector, and clarifies asset status and management during the transition to Special Mining Business Licenses (IUPK). Its issuance implements Article 104 of Government Regulation Number 27 of 2014, as amended by Government Regulation Number 28 of 2020, and replaces PMK 225/PMK.06/2021 to clarify the appointment of the Budget User Proxy of the State General Treasurer (KPA BUN) and align BMN management mechanisms with current mining sector provisions. This regulation strengthens certainty, consistency, and accountability in BMN management following PKP2B expiration.

Comparison with Previous Regulation

This regulation repeals and replaces Regulation of the Minister of Finance Number 225/PMK.06/2021. The following is a comparison between the new regulation and the old regulation:

Key Provisions

Article 2: Scope and Asset Classification

This Article stipulates the determination of PKP2B BMN covering all goods obtained under PKP2B from 1981 to 1993, along with their amendments. In addition to assets such as land, machinery, and buildings, this Article also includes mining operational assets as BMN, including settling ponds, cleared land areas, stockpiles, and operational waste.

Article 14: Utilization Fee for Asset Use

For Holders of IUPK as a Continuation of Operation, the use of PKP2B BMN is not free of charge. This Article establishes that such asset utilization is subject to a Utilization Fee. The Utilization Fee rate adjusts to provisions of laws and regulations in the taxation or mineral and coal sector state revenue fields.

Article 17: Operational Asset Replacement Flexibility

To maintain operational continuity, IUPK Holders (Continuation of Operation) are permitted to replace machinery and/or equipment directly through sole distributors. The main requirement is that the replacement goods value must be at least equal to the book value of the replaced PKP2B BMN.

Article 20: Land Certification Obligation

To ensure legal certainty of state ownership, PKP2B BMN in the form of land must be certified in the name of the Government of the Republic of Indonesia c.q. Ministry of Finance. Contractors have an obligation to surrender original ownership documents and assist in indicating physical land data in the field.

Article 24: Asset Insurance Option

Contractors or IUPK Holders are granted the authority to insure PKP2B BMN under their control to mitigate operational risks. The implementation of this insurance must be reported to the Proxy of Property User.

Article 25: Legal Recourse and Dispute Security

This Article mandates legal action for PKP2B BMN involved in disputes or court cases. Such legal actions include applying for land right blocking to the land office (for certified land), applying for certification (for uncertified land), filing civil/State Administrative lawsuits, and filing criminal reports if there are indications of criminal acts by other parties. In the event of a dispute, the relevant parties (Contractor/Government) must conduct maximum defense or legal intervention to secure state assets.

Article 43: Triggers for Asset Handover Obligation

Contractors must hand over PKP2B BMN to the government if the following conditions occur:

1. Expiration of the PKP2B/IUPK term;

2. Contract cancellation or business license revocation;

3. Assets are required for National Strategic Projects; or

4. The assets are no longer used for coal mining business activities.

Article 49: Asset Sale Approval Hierarchy

The asset transfer process (sale/grant) is regulated by a strict approval hierarchy based on asset value and type:

1. Land/Buildings: Mandatory House of Representatives (DPR) approval (except for public interest/spatial planning).

2. Other Assets (Machinery/Equipment):

• Value > Rp100 Billion: DPR approval.

• Value of more than Rp10 Billion to Rp100 Billion: Presidential approval.

• Value ≤ Rp10 Billion: Property Manager (Ministry of Finance) approval.

Article 51: Sale Without Auction

Although state asset sales are generally mandatory via auction, this Article provides an exception. Sales may be conducted without auction if the PKP2B BMN is required by State-Owned Enterprises (BUMN) or Regional-Owned Enterprises (BUMD) for public interest based on provisions of laws and regulations.

Article 69: Self-Inventory

For administrative efficiency, the Proxy of Property User may delegate physical inventory tasks to the Contractor/IUPK Holder. The results of this self-inventory are set forth in Minutes and must be accompanied by a Statement of Absolute Responsibility (SPTJM), placing data accuracy as the full responsibility of the company.

Article 88: APIP-Based Indemnity Settlement

This Article regulates sanctions for the loss of BMN due to Contractor negligence. The indemnity settlement mechanism, whether paying cash equivalent to the asset value or replacing with similar goods, is determined by the Proxy of Property User referring to the review results of the Government Internal Supervisory Apparatus (APIP).

Article 90: BMN Status Time Limit (Cut-Off)

This provision regulates the cut-off time for BMN recognition for IUPK Holders as a Continuation of Operation. Goods purchased from the issuance of the IUPK until the end of the tax/calendar year of the validity of special Non-Tax State Revenue (PNBP) provisions remain recognized as BMN. After said period, purchased goods are no longer deemed PKP2B BMN, but become company assets.

Transitional Provisions

To ensure legal certainty during the transition period, Article 91 stipulates that any application for PKP2B BMN management submitted but not yet approved before this regulation became effective will be processed using the provisions of this PMK 77/2025. However, management approvals or decisions issued before this regulation became effective are declared to remain valid, and the settlement of such approvals and decisions remains subject to the old regulation (PMK 225/2021). Similarly, utilization, transfer, or disposal activities currently in progress when this regulation was issued may continue until completion based on the old regulation.

Closing

PMK 77/2025 introduces several key changes to coal mining management. Key adjustments include enforcing the cut-off rule for asset recognition during the IUPK period, simplifying waste recording, and authorizing operational asset replacement to maintain continuity. For stakeholders, these new provisions require more orderly asset management, ranging from implementing self-inventory to fulfilling Utilization Fee obligations to reduce potential asset disputes in the future.