The Indonesian government has officially implemented new royalty rates for natural resources under the Government Regulation No. 18 for IUPK (Special Mining Licence) royalty change and No. 19 2025 for metals and mining royalty changes. Overall, the changes are mainly inline with what the government proposed in March 2025 with minor changes for nickel matte, ferronickel, and copper ore (see our previous report). In this note, we give an updated analysis for selected listed companies based on: 1) a cut in coal IUPK royalties; and 2) a hike in non-coal mineral royalties.

Royalties for coal IUPK license holders have been cut from 28% to 19%

Based on the 25 March HBA (Harga Batubara Acuan, Indonesia’s national coal benchmark price) of USD120/t, the existing royalties of 28% for IUPK license holders will be reduced to 19%. This will benefit IUPK holders greatly, namely Indika Energy (INDY IJ, Buy), Bumi Resources (BUMI IJ, Not rated), and Adaro Andalan Indonesia (AADI IJ, Buy), in our view, for which we estimate will record net earnings increase of 364%, 42% and 28% in FY25F, respectively, due to this royalty decrease.

Royalties for minerals, on the other hand, have been hiked although the increases are lower than the initial proposal

Conversely, the royalties for minerals such as nickel and nickel products, gold, and copper, among others, have been hiked. Overall the increase is lower than previous proposed rate. The royalty rates for non-coal commodities have been raised in varying degrees, and will also be affected by their respective Harga Mineral AcuanHMA (, national minerals benchmark price).
Our analysis shows varying impacts on NPAT and P/E due to different product compositions. It is also important to note that if a company is vertically integrated, the royalties will apply only to the end product, and not for every step in the value chain, such as in the case for Vale Indonesia (INCO IJ, Buy) (refer to Fig 2 for details on each company).

Stocks for action

We believe AADI and INDY (both Buy) are beneficiaries given the cuts in their royalties, alongside their attractive valuations. We estimate AADI will have an attractive dividend yield of 10.7% in FY25F, and has potential to be included in stock indexes. We also like INDY for its gold mining development, which we expect to start contribution in 2026F.

Fig. 3: Impact on P/E from coal royalties change

Fig. 4: Impact on NPAT from coal royalties change

Fig. 5: Impact on PE from minerals royalties change

Fig. 6: Impact on NPAT from minerals royalties change

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general. 

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Michael Wildon (michael.wildon@verdhana.id)