[SMM Analysis][SMM Analysis] Update on Government Regulation No. 28 of 2025 (PP 28/2025): Impact on Indonesian Nickel Smelters

Introduction

Following the previous explanation of Government Regulation No. 28 of 2025 (PP 28/2025) on the "Risk-Based Implementation of Business Licensing" issued on June 5, 2025, SMM attended the "FINI Coffee Morning" event organized by the Indonesian Nickel Smelting Association (FINI). The event featured Dr. Setia Diarta, M.T., Director of the Metal, Machinery, Transportation Equipment, and Electronics Industries (ILMATE) at the Ministry of Industry, and was attended by stakeholders from various smelters across Indonesia.

I. Why Has This News Recently Gained Attention?

Although PP 28/2025 was issued in June 2025, the government system provided a four-month transition period. Consequently, from October to November, smelters in Indonesia successively received notifications from the OSS (Online Single Submission system, used for submitting Industrial Business License/IUI applications). The notifications required enterprises to submit a written statement declaring that they would not produce MHP, FeNi, NPI, or nickel matte.

However, the OSS application system is not yet fully stable, frequently experiencing instability and crashes, which has affected the submission process.

II. Discussion Points (Presented by Mr. Eko Widodo, Head of the Business Licensing Verification Team for the Metal Industry/ILMATE)

• For smelters that have already entered the construction phase, the Indonesian Nickel Smelting Association (FINI) will assist in submitting applications to the government to seek exemptions from the new regulation, as these projects commenced construction before the regulation was issued. When submitting the relevant supporting documents through the OSS system, enterprises should attach a declaration confirming that construction started before October 2025, specifying the exact commencement date.

• For smelters still in the land acquisition phase or those that have not yet started construction, obtaining an exemption will be more challenging.

• For enterprises planning to build more downstream facilities (such as nickel sulphate or battery materials plants) but still constructing and operating NPI, FeNi, nickel matte, or MHP smelters under different company names, these will still be considered as two separate corporate structures. Therefore, for such special circumstances, further discussions with the government are required.

III. Conclusion and Follow-up Updates

Based on this discussion, smelters currently under construction are likely to receive special consideration, as their construction began before PP 28/2025 was issued. To further clarify related matters, FINI has been invited to a potential coordination meeting with the Indonesian Coordinating Ministry for Economic Affairs next week. SMM will continue to monitor developments regarding this regulation and provide relevant interpretations and the latest updates.