In a rush for a last-minute reshuffle, President Joko "Jokowi" Widodo appointed one of his most trusted aides, Bahlil Lahadalia as energy and mineral resources minister, replacing Arifin Tasrif who has close ties with the Indonesian Democratic Party of Struggle (PDI-P). Bahlil's appointment, however, raises concerns about potential conflicts of interest due to his business interests in mining.

As Bahlil takes the helm of the Energy and Mineral Resources Ministry, Rosan Roeslani, who led the campaign team of Prabowo Subianto and his running mate Gibran Rakabuming Raka, took Bahlil's former position as investment minister. The new ministers will work only for two months before the inauguration of Prabowo as the new president on Oct. 20.

What raises more concerns is the fact that Bahlil owns several mining companies, which put him in stark conflict of interest. Bahlil controls several mining concessions through holding company PT Rifa Finance and PT Bersama Papua Unggul. Rifa Finance is a holding of 10 companies, including PT Ganda Nusantara, PT MAP Surveillance, PT Pandu Selaras, PT Cendrawasih and PT Mapsource Mining.¹ 

Bersama Papua Unggul and Rifa Finance together own 100 percent of PT Meta Mineral Perdana, a mining company with two mining concessions of 470 hectares and 165.5 ha in North Konawe, Southeast Sulawesi. Meanwile, Rifa Capital is conducting coal mining exploration on 39,000 ha area in Fakfak, West Papua, and owns 11,000 ha of nickel mining area in Halmahera, North Maluku.² 

Bahlil claimed that he had given up all positions in his various companies since he entered Jokowi's administration back in 2019. Bahlil believed that his previous experience as a mining business player would help him address what needs to be improved in the ministry to be more in line with the needs of the industry. Bahlil's assurance, however, has not convinced civil society organizations because Bahlil still owns and controls his companies that own mining concessions.

On Monday, when Bahlil was inaugurated as energy and mineral resources minister, seven coal stocks weakened. The companies affected were Indika Energy (INDY), Bumi Resources (BUMI), Adaro Minerals Indonesia (ADMR), Harum Energy (HRUM), Bukit Asam (PTBA), United Tractors (UNTR) and Indo Tambangraya Megah (ITMG).³ 

It had been rumored for some time that Bahlil would take over the position as the energy and mineral resource minister in order to smoothen the process of distributing mining concessions to religious-based organizations, especially the country's two largest Muslim organizations, Nahdlatul Ulama (NU) and Muhammadiyah. While the government has given NU a coal mining concession in East Kalimantan, it has not found one for Muhammadiyah. Bahlil said Muhammadiyah will get one soon.⁴ 

Bahlil said President Jokowi had given him instruction on what he should do in the next two months as the energy and mineral resources minister. They include increasing oil and gas lifting, especially from idle wells, strengthening the domestic industry of liquefied petroleum gas, strengthening the regulations in the upstream oil and gas industry and pushing further the downstream development of the mineral-based industry.

Several sources have claimed that Arifin Tasrif's removal from his post as energy and mineral resources minister cannot be separated from his close ties to Indonesian Democratic Party of Struggle (PDI-P) chairwoman Megawati Soekarnoputri. Arifin is even said to have often reported to Teuku Umar, Megawati's residence, regarding energy policy.

This is what led President Joko "Jokowi" Widodo to be dissatisfied with Arifin. The reshuffle during this transitional period was largely determined by Jokowi and served his interests. The presence of new names originating from Gerindra in the cabinet marks a transition from the Jokowi era to that of Prabowo. 

But many believe that Bahlil Lahadalia's appointment as the energy and mineral resources minister is part of Jokowi's strategy to keep his control over the country's wealth, thus allowing him to maintain his political position in the future.

On the other hand, Bahlil's presence is expected to accelerate the process of granting mining concessions to religious organizations. Although mining permits have been granted, Nahdlatul Ulama (NU) has not yet been able to operate any mines. This is because they have not paid the compensation fee of at least Rp 500 billion (US$32.29 million).

Bahlil will reduce this cost. NU would surrender if they were required to pay this fee upfront unless someone is willing to cover it for them. The organization will acquire mining land formerly belonging to Kaltim Prima Coal.

The allocation of mining concessions to mass organizations is already outlined in the presidential regulation, but it contradicts the higher law. That is why Arifin dared not sign the RAB, which is a requirement for obtaining the concession.

Arifin has been delaying the approval of the latest long-term electricity procurement plan (RUPTL), impacting many new and renewable energy projects and programs.