Metal mining – Gross split scheme confirmed to oil & gas

Metal mining – Gross split scheme confirmed to oil & gas Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia has explicitly confirmed that the gross split profit-sharing scheme will remain exclusive to the upstream oil and gas (migas) sector and will not be adopted for the mineral and coal mining (minerba) sector. This statement firmly puts to rest recent market speculation — previously fueled by internal ESDM studies evaluating a potential 70:30 gross split in favor of the government for mining operations. Bahlil emphasized that existing mining regulations will remain unchanged to ensure legal and business certainty. Previously, discussions regarding an overhaul of the mining profit-sharing system had been considered as a means to optimize state revenues; however, the government noted that any such evaluation involves multiple considerations, including technical, economic, and state revenue assessments, with no formal decision reached to date. (Source: Bloomberg Technoz) Comment: The confirmation that the gross split scheme will not be applied to the minerba sector is a positive regulatory relief for mining companies, particularly those with high operating cost structures, as the previously studied scheme would have significantly compressed profit margins. However, risks remain as the government has not fully closed the door on alternative profit-sharing reviews to optimize state revenues — warranting continued monitoring from investors.