ASIATODAY.ID, JAKARTA — The Indonesian government has officially released the country’s first comprehensive regulatory framework governing the management of rare earth elements (REE), a strategic mineral group essential for high-tech, defense, and clean-energy industries.
The new regulation, issued under Minister of Energy and Mineral Resources (ESDM) Regulation Number 18/2025, serves as the implementing rule for Government Regulation (PP) Number 39/2025.
Signed by Minister Bahlil Lahadalia on November 14, 2025, the regulation outlines how rare earth resources will be explored, designated, managed, and utilized—while strengthening state control and ensuring priority allocation for domestic strategic industries.
Key Provisions: Stronger State Control & Priority for National Industries
The new regulation introduces detailed rules on the designation of Mining Business Permit Areas (WIUP) for rare earths and the role of state-owned enterprises (SOEs).
Article 4 highlights several core provisions:
1. The Ministry will conduct geological assessments to identify potential rare earth mineral zones.
2. The Minister will officially designate WIUP areas for rare earth development.
3. SOEs may be appointed as operators for rare earth exploration and utilization.
4. Utilization of rare earth resources must prioritize domestic strategic industries, including defense, electric vehicles, battery ecosystems, and advanced technology.
5. Appointed SOEs must comply with all business licensing requirements.
6. SOE appointments include mandatory data compensation payments and placement of exploration commitment guarantees.
For exploration guarantees, the regulation sets a deposit requirement ranging from IDR 50 million for WIUP areas under 40 hectares to IDR 1.5 million per hectare for areas above 40 hectares.
Integrated with PP 39/2025: Prabowo Strengthens Legal Basis for Rare Earth Development
The ministerial regulation follows the issuance of PP Number 39/2025 signed by President Prabowo Subianto on September 11, 2025. For the first time, the government inserted a dedicated rare earth clause—Article 18A—into Indonesia’s mining governance framework.
The article stipulates:
Rare earth resources may originate from WIUPs or as by-products of mineral processing and refining.
Rare earth utilization must prioritize Indonesia’s strategic industries.
Further technical details are mandated to be regulated under a ministerial decree—now fulfilled by Regulation 18/2025.
This marks a major evolution from PP 96/2021, which previously contained no provisions on rare earths.
Why It Matters: Rare Earths Are the Core of Global Technological and Geopolitical Power
Vice Minister of ESDM Yuliot Tanjung explained that most rare earth occurrences in Indonesia currently appear as by-products of existing processing facilities. Dedicated mining operations, however, require systematic exploration to map locations, types of elements present, and estimated reserves.
“Rare earths in Indonesia are generally by-products. For dedicated mining activities, we must conduct exploration to determine the location, mineral composition, and potential deposits,” Yuliot said on Friday, November 21, 2025.
The new framework aims to:
Strengthen state sovereignty over strategic critical minerals
Ensure secure supply for Indonesia’s national industrial roadmap, including EVs, batteries, defense systems, and clean energy
Elevate Indonesia’s geopolitical leverage, given the global competition for rare earth control
Next Steps: WIUP Designation and SOE Deployment
Following the issuance of Regulation 18/2025, the government will begin mapping and designating WIUP areas specifically for rare earth minerals. State-owned enterprises will be prioritized to operate these strategic blocks to secure supply for domestic industries. (AT Network)
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