After Receiving Mining Permits, NU and Muhammadiyah To Receive Cabinet Positions in President Prabowo’s New Government, Tempo.co

By Vedro Imanuel G and Imam Hamdi for Tempo.co, October 15, 2024

JAKARTA, Indonesia — President-elect Prabowo Subianto summoned 49 ministerial candidates to his residence at No. 4 Kertanegara Street in the Kebayoran Baru disctrict of South Jakarta on Monday, October 14, 2024. Among the invitees were prominent figures from two of Indonesia’s largest Islamic community organizations, Nahdlatul Ulama (NU) and Muhammadiyah.

Several high-ranking NU officials were present at Prabowo’s residence, including Saifullah Yusuf, Nusron Wahid, Nasaruddin Umar, and Arifatul Choiri Fauzi. Saifullah, widely known as Gus Ipul, is the Secretary-General of NU’s national Executive Board (PBNU). He currently serves as Minister of Social Affairs under soon to be out-going President Joko Widodo, after previously holding the position of Deputy Governor of East Java for two terms.

Nusron Wahid, a politician from the Golkar Party, also holds a leadership role in PBNU, serving as Deputy Chairman. Similarly, Nasaruddin Umar, the Grand Imam of Istiqlal Mosque, is a prominent PBNU cleric, holding the position of chair of NU’s religious advisory council (Rais Syuriyah). Meanwhile, Arifatul Choiri Fauzi, the Secretary of the NU Muslimat Central Board, was previously Deputy Chairperson of the National Campaign Team for Prabowo and Gibran during the recent presidential election in Febrary 2024 which they won.

“I didn’t expect to receive an invitation to assist him in the next government,” Nasaruddin told reporters.

Prabowo has also invited members of Muhammadiyah to join his cabinet. The General Chairman of the Gerindra Party has tapped Abdul Mu’ti, the General Secretary of the Muhammadiyah Central Board (PP Muhammadiyah), to fill a ministerial role. Abdul Mu’ti is expected to lead the Ministry of Primary and Secondary Education, a post traditionally aligned with Muhammadiyah, alongside a deputy minister.

The inclusion of NU and Muhammadiyah in Prabowo’s cabinet underscores the ongoing collaboration between the government and these two influential religious organizations. Both groups have previously garnered attention for the controversial decision to accept grants of business mining permits so they can also manage mining operations.

The decision to allow religious organizations to manage mining concessions is grounded in Government Regulation No. 25/2024, which amends Regulation No. 96/2021 Concerning the Implementation of Mineral and Coal Mining Business Activities. A newly inserted clause—Article 83A—grants priority access to mining permits for mass community organizations, including religious groups, within designated special mining business areas, known as WUIPK.

This article is based on Tempo.co’s NU and Muhammadiyah Receive Cabinet Positions After Securing Mining Permits.

In earlier news…

Tasty Mines to Feed Religious Organizations

By Riani Sanusi Putri, for Koran Tempo, August 1, 2024

Indonesia’s Minister for Investment Bahlil Lahadalia has assured major Islamic community organization with 60 million members Muhammadiyah it will be managing a mine with really big reserves of coal. But will this guarantee the incomes of religious organizations?

Really Big

Indonesia’s Investment Minister Bahlil Lahadalia has guaranteed that the coal mining area previously under the Coal Mining Work Agreement (PKP2B) to be managed by Muhammadiyah holds really large coal reserves. However, he has yet to disclose the location.

Meanwhile, rival Islamic mass community organization with more than 95 million members Nahdlatul Ulama (NU) will be managing the former coal mining permit area of PT Kaltim Prima Coal (KPC). According to the annual report of its parent company, PT Bumi Resources Tbk, KPC controlled coal reserves of 1.01 billion tons as of December 31, 2021.

NU accepted the offer to manage the coal mine to finance a variety of community infrastructure programs. Muhammadiyah emphasized that the profits from the mining operations would support their religious activities, charitable efforts, and the broader community.

Really Big Reserves for Religious Organizations

NU and Muhammadiyah have accepted mining permits from the government, granting them access to coal-rich areas. Muhammadiyah’s national executive has finally accepted the mining permit (special mining business permit, or IUPK) offered by the government. Investment Minister Bahlil Lahadalia guaranteed the quality of the site to be granted to the religious organizations. The area comes from a former coal mining contract (coal mining work agreement, or PKP2B). “God willing, we are providing the best ex-PKP2B areas outside of KPC,” said Minister Bahlil at the Investment Ministry on Monday, July 29, 2024.

Signed into Law by President Joko Widodo

The mining permits for religious organizations were issued after President Joko Widodo signed into force Government Regulation (PP) No. 25/2024 on Thursday, May 30, 2024. The regulation revised PP No. 96/2021 regulating the implementation of mineral and coal mining activities. Article 83A of PP No. 25/2024 provides that religious organizations will receive special mining business areas (WIUPK).

The special mining areas granted are limited to former PKP2B concession areas, meaning the areas allocated to religious organizations are exclusively for coal, or as requested by the organizations. As a result, organizations are to receive areas containing significant coal reserves, such as areas from former PKP2B holders whose operational areas have been reduced by the Government.

Before Muhammadiyah, Nahdlatul Ulama had already accepted the offer of a mining business permit. NU was even promised a coal mining concession three years ago.

The mining permit was a promise President Widodo made during Nahdlatul Ulama’s annual national congress in December 2021. He assured the organisation that the land given to NU would be really big. “I have prepared the concession. I guarantee it will be big; there’s no way I’d give NU something small,” President Widodo claimed during the investiture the organization’s new national executive in the East Kalimantan provincial capital of Balikpapan on the island of Borneo on January 31, 2022.

Unlike the Muhammadiyah Association, whose PKP2B area to be managed is still undisclosed, the government has already prepared former KPC land for PBNU. The company is a subsidiary of the Bakrie Group.

The mining location for NU is in East Kutai Regency, East Kalimantan. KPC’s mining permit was to have expired on December 31, 2021, however, the government then required the company to cut part of its concession area if it wanted to extend its business permit. This requirement applies to all PKP2B companies seeking to extend their operational and production permits.

KPC’s area was reduced from 84,932 hectares to 61,545 hectares. The remaining 20,000 hectares are potential areas for NU to manage. However, Minister Bahlil did not disclose why NU had received the former KPC area.

Coal Reserves

According to records from the Coordinating Ministry for Maritime and Investment Affairs, the coal reserves in the former KPC area exceed 150 million tons. The coal potential in the area can also be seen in the annual report of KPC’s parent company, PT Bumi Resources Tbk.

In the 2021 annual report of PT Bumi Resources Tbk, KPC had coal reserves of 1.01 billion tons and resources of 5.85 billion tons. As of December 31, 2023, KPC’s total reserves were 679 million tons, with resources amounting to 4.39 billion tons. The reference coal price as of June 2024 was USD 130.44 per ton, an increase from January 2024’s level of USD 125.85 per ton.

PT Bumi Resources Director Dileep Srivastava declined to comment on NU’s use of the former KPC land. “KPC has handed it over to the government. So please ask the government directly,” he said.

Other PKP2B coal reserves include Adaro Minerals Indonesia’s 173 million tons, with coal resources of 975.6 million tons as of December 2023. Adaro’s PKP2B area spans 146,579 hectares. Also, the former PKP2B areas of Multi Harapan Utama cover 9,563 hectares, Kideco Jaya Agung 13,613 hectares, and Tanito Harum 19,947 hectares.

Not-For-Profit Mining

Muhammadiyah’s national executive accepted the mining permit after holding a plenary meeting on Saturday, July 13, 2024. Muhammadiyah national Secretary General Abdul Mu’ti stated that Muhammadiyah’s mining development would aim to be a not-for-profit business model.

Blessing From God

Abdul explained that mining profits would support Muhammadiyah’s religious activities, charitable efforts, and the wider community. He emphasized that accepting the mining permit was solely based on the belief that natural wealth is a blessing from God, and humans are entrusted to manage it.

“We will use it as best as possible for material and spiritual welfare while maintaining a balance and avoiding environmental damage,” Abdul said on July 28, 2024.

Local Communities

Chair of Muhammadiyah’s national Legal and Human Rights Council Trisno Raharjo added that the organization is prepared to return the special mining area permit to the government if its operations cause harm. The harm referred to is if mining activities damage the environment and cause suffering to the surrounding communities.

Meanwhile, NU accepted the permit because it needs funds to finance various NU infrastructure programs. “First of all, I must say, NU needs any legitimate source of income to finance the organization,” NU Chair Yahya Cholil Staquf said at NU’s national office in Central Jakarta on June 6, 2024.

According to Yahya, the resources and capacities of NU members are no longer sufficient to support a variety of NU’s programs, such as operating 30,000 Islamic boarding schools and madrasahs. So the mining business is expected to become a source of income for the organization.

Criticisms

National non-governmental environmental organization the Mining Advocacy Network (Jatam) believes that the mining permits may not necessarily promote the welfare of religious organizations. This is because mining is a capital-intensive and technology-intensive business. “Mining economies are very fragile, unsustainable, land-hungry, and water-hungry,” the organization said in a press release on June 3, 2024.

Currently, there are nearly 8,000 mining permits in Indonesia, covering more than 10 million hectares. The Mining Advocacy Network noted that mining operations not only remove food and water spaces but also disrupt health and cause deaths.

No Guarantee of Income

Indonesia Mining & Energy Forum (IMEF) Chair Singgih Widagdo also believes that the benefits of religious organizations managing mines depends significantly on the level of investment and production approved in the work plan and budget (RKAB). This includes the impacts of mining costs and coal prices when the organizations’ mines become operational.

“Entering the mining industry requires significant investment and entails risks related to prices and is heavily influenced by energy policies of importing countries,” Singgih told Tempo magazine on Wednesday, July 31, 2024.

Transition Risks

He reminded religious community organizations accepting mining permits that managing a coal mine is not easy. Especially in the market, coal is currently facing energy transition policies from other countries, particularly Indonesia’s largest importers, China and India.

Singgih also emphasized the need for detailed evaluations of coal reserves, coal quality, infrastructure requirements, assumed mining costs, and market potential. The areas granted should not turn out to be empty promises which could harm the organizations. Moreover, the released former PKP2B areas are often not consolidated and can be scattered.

As majority shareholders, the organizations must also prepare to meet the requirements for managing the mines. They must adhere to appropriate mining practices or standards.

Center for Economic and Law Studies (Celios) economist Nailul Huda believes that the former PKP2B areas to be distributed to NU and Muhammadiyah might have environmental and social issues. “In the short term, the economic benefits may be good. But in the long term, there may be only losses,” he told Tempo magazine yesterday.

He stressed, therefore, that organizations deciding to accept the IUPK should thoroughly understand the history and issues associated with the concession areas granted. Also, the quality of human resources must be prioritized, especially in managing mines that are environmentally friendly.

This article is based on https://koran.tempo.co/read/ekonomi-dan-bisnis/489391/cadangan-tambang-ormas-keagamaan and https://kumparan.com/kendarinesia/perusahaan-tambang-di-kolaka-utara-sultra-mengeruk-halaman-sekolah-1t5uIsCt1Il/3

Featured image credit: One Piece, Tempo.co. Also check out Dharta, F. Y., Susanto, T., Rahman, K. A., & Pambudi, A. W. (2025). The Jolly Roger flag welcomes August 17th, 2025: Indonesia’s new independence nationalism in the era of social media. Media Asia, 1–10. https://doi.org/10.1080/01296612.2025.2550586

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