President Prabowo Issues PP 39/2025 Allowing Cooperatives and Religious Organizations to Manage Mining Businesses
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| Illustration of a coal mining site in Indonesia now open to cooperatives and religious organizations. |
President Prabowo Subianto has officially signed Government Regulation (PP) No. 39 of 2025, the Second Amendment to PP No. 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities (Minerba). Through this new regulation, the government opens wider opportunities for various entities to manage mining operations, including cooperatives, small and medium enterprises (SMEs), religious organizations, regional-owned enterprises (BUMD), and private companies.
This move marks a strong signal from the government that Indonesia’s natural resources management will become more inclusive. Not only large corporations but also small businesses and social organizations can now participate in this strategic industry.
Cooperatives and SMEs Get Mining Areas Up to 2,500 Hectares
Under PP 39/2025, the government clearly sets the maximum area of Mining Business Permit (WIUP) that each entity may manage. For cooperatives and SMEs, the WIUP for metallic minerals and coal mining is limited to a maximum of 2,500 hectares.
This policy is expected to improve community welfare in regions with mining potential while strengthening the role of cooperatives and SMEs in the energy and mineral resources sector. The government believes involving small-scale enterprises can help spread economic growth more evenly and create new job opportunities in the local mining industry.
Religious Organizations Get Larger Mining Areas
Interestingly, the regulation also allows religious organizations to manage mining operations. The WIUP granted to these organizations is significantly larger than those given to cooperatives and SMEs. Religious organizations may receive up to 25,000 hectares for metallic minerals and up to 15,000 hectares for coal mining.
This policy aligns with President Prabowo and Vice President Gibran’s vision of empowering religious groups economically by granting access to manage strategic national assets. The government considers religious organizations capable of running businesses professionally, especially when partnered with educational institutions, Islamic boarding schools, or social foundations with strong management capacity.
BUMN, BUMD, and Private Sector Remain Key Players
The regulation also reaffirms the vital role of state-owned enterprises (BUMN), regional-owned enterprises (BUMD), and private companies in managing the Minerba sector. According to PP 39/2025, the WIUP for BUMN and BUMD collaborating with universities is limited to 25,000 hectares for metallic minerals and 15,000 hectares for coal mining.
These same limits apply to BUMN involved in downstream processing (hilirisasi) projects. The goal is to ensure that the mining industry focuses not only on raw material extraction but also on domestic processing and value-added production.
With this, the Minerba sector is expected to become a major driver of Indonesia’s national industrialization, which remains one of the core priorities of the new administration.
Promoting Economic Equity and Downstream Processing
Through this new policy, the government aims to ensure that mining potential benefits not just a few, but society at large. By involving cooperatives, SMEs, and religious organizations, local economies are expected to grow and create new business opportunities in the mining sector.
Meanwhile, by maintaining the roles of BUMN and BUMD, the government seeks to uphold sustainability and professionalism in resource management—especially in the downstream process that adds greater economic value domestically.
Downstreaming is a key focus of PP 39/2025, as the policy emphasizes the importance of domestic mineral processing to increase value-added products and reduce dependence on raw material exports.
Implementation Challenges
Despite its potential, implementing this policy will not be easy. The government must ensure that cooperatives, SMEs, and religious organizations granted permits have adequate technical, managerial, and governance capabilities to operate mining businesses properly.
Moreover, transparency in granting WIUPs will be crucial to prevent misuse of permits or illegal transfers to third parties. Monitoring by local governments and relevant ministries will play a key role in ensuring the success of this regulation.
A New Step Toward National Energy Independence
Overall, PP 39/2025 is a strategic step to expand public participation in the Minerba sector while reinforcing the national downstreaming agenda.
The involvement of cooperatives, SMEs, religious organizations, and business entities is expected to drive inclusive economic growth, create more jobs, and strengthen Indonesia’s energy independence in the future.
Through this new regulation, the government aims to ensure that Indonesia’s natural resources are managed fairly, sustainably, and for the benefit of all—not just a privileged few.
