NEW COAL BLENDING RULES: Indonesia Introduces a 14 Business Day Approval Framework for Coal Blending
Introduction
The Ministry of Energy and Mineral Resources (”MEMR”) has issued Decree of the Minister of Energy and Mineral Resources No. 323.K/MB.01/MEM.B/2026 on Guidelines for the Implementation of Applications, Evaluations, and Approvals for Coal Blending in Mineral and Coal Mining Business Activities (”Decree 323/2026”), effective as of 13 August 2026. The Decree establishes a centralized framework governing the application, evaluation, and approval of coal blending activities through a designated electronic information system, while introducing a statutory timeline for regulatory decision-making.
Beyond formalising the approval process, Decree 323/2026 introduces more stringent documentary requirements, clarifies the procedures applicable to coal blending approvals, and expressly links blended coal transactions with non-tax state revenue (Penerimaan Negara Bukan Pajak or PNBP) obligations. Collectively, these changes are intended to improve regulatory certainty while strengthening compliance and oversight within Indonesia’s coal mining sector.
Key Changes
Mandatory Electronic Approval Process
Decree 323/2026 requires holders of Production Operation Mining Business Licenses (IUP), Production Operation Special Mining Business Licenses (IUPK), continuation IUPKs for coal commodities, and Coal Mining Concession Work Agreements (PKP2B) to obtain coal blending approval through the designated electronic information system before undertaking coal blending activities.
The approval process comprises three principal stages. Following submission of an application and supporting documentation through the electronic system, the Directorate General of Minerals and Coal evaluates the completeness and accuracy of the application before issuing either an approval or a rejection together with the reasons for such decision.
Expanded Documentation Requirements
Applicants are now required to submit a more comprehensive set of supporting documents as part of the approval process. In addition to a valid Work Plan and Budget (Rencana Kerja dan Anggaran Biaya or RKAB) and the relevant coal purchase and sale agreements, applicants must also provide simulations of coal specifications before and after blending. Furthermore, quality test results or certificates of analysis for both the parent coal and the blended coal must be issued by a surveyor registered with the relevant ministry.
Under the new framework, publication layouts will only be prepared after the applicable PNBP has been successfully paid through the official online payment system. The publication number will not be issued until payment has been completed, and failure to make payment will automatically prevent the issuance of the publication decision. This represents a procedural change intended to integrate payment verification into the electronic publication workflow.
Statutory 14-Business-Day Approval Timeline
One of the most significant developments introduced by Decree 323/2026 is the establishment of a statutory timeline for processing coal blending applications. Once an application has been declared complete and accurate, the Government must complete the evaluation and decision-making process within a maximum of 14 business days, consisting of up to 10 business days for evaluation and 4 business days for the issuance of approval or rejection.
The Decree also provides that any approval granted will remain valid throughout the validity period of the applicant’s approved RKAB, thereby providing greater certainty for operational planning and production scheduling.
Alternative Procedure During System Disruptions
Recognising the possibility of technical disruptions to the electronic information system, Decree 323/2026 establishes an alternative manual submission mechanism where force majeure affects the operation of the system. Under such circumstances, applicants may submit their applications directly to the Minister through the Director General, provided that all documentary requirements applicable to electronic submissions are likewise fulfilled.
Integration with PNBP Obligations
Decree 323/2026 also expressly connects coal blending activities with Indonesia’s fiscal framework by providing that every sale of blended coal is subject to the obligation to calculate and pay the applicable non-tax state revenue (PNBP). The Decree requires such payments to be made in accordance with the prevailing laws and regulations governing state revenue, reinforcing that compliance extends beyond obtaining operational approval and encompasses ongoing financial reporting and payment obligations.
Practical Implications
Decree 323/2026 represents a significant step towards a more structured and digitally integrated compliance framework for Indonesia’s coal mining industry. The introduction of a statutory approval timeline provides greater certainty for mining companies in planning production schedules and commercial transactions. However, the practical benefit of this timeline depends on the completeness of the application submitted, as the 14-business-day review period only commences after the application has been declared complete and accurate.
Accordingly, companies can no longer regard the preparation of supporting documentation as a routine administrative exercise. Instead, the quality and consistency of technical documentation including coal blending simulations, surveyor-issued certificates of analysis, and supporting contractual documents will directly influence the efficiency of the approval process and may determine whether an application proceeds without delay. Incomplete or inconsistent submissions may result in rejection, requiring applicants to rectify deficiencies before resubmitting their applications.
Furthermore, the express linkage between coal blending activities and PNBP obligations highlights the need for closer coordination between operational, commercial, finance, and compliance functions. Mining companies should therefore ensure that regulatory compliance is integrated into both their operational planning and internal financial reporting processes to minimise regulatory risk and avoid disruption to business activities.
Compliance Considerations
Mining companies engaging in coal blending activities should proactively review whether their approved RKAB adequately accommodates planned blending operations and ensure that all coal purchase and sale agreements remain consistent with the approved RKAB. Companies should also prepare comprehensive coal blending simulations and engage registered surveyors at an early stage to obtain the required quality testing certificates before applying. Taking these preparatory steps will help reduce the risk of administrative rejection and enable the statutory review period to commence without unnecessary delay.
In addition, companies should assess whether their internal accounting and compliance systems are capable of accurately calculating and reporting the PNBP obligations arising from blended coal transactions. Given the increasing digitalisation of regulatory processes within Indonesia’s mining sector, businesses that strengthen internal document management, regulatory compliance procedures, and cross-functional coordination will be better positioned to maintain operational continuity while complying with the new framework introduced under Decree 323/2026.