The ministry's former director general of minerals and coal, Ridwan Djamaluddin, oversaw a drive in 2021 to streamline approval procedures for miners' annual work plans, after which some firms were granted approval to mine for nickel ore.
These miners then used the approval to mine areas not under their concession, the AGO said in a statement late on Wednesday.
A message sent to Ridwan seeking comment on Wednesday was not delivered. AGO spokesperson Ketut Sumedana said 10 suspects were being questioned.
Indonesia has the world's largest reserves of nickel ore, an important components for electric vehicle (EV) batteries.
It has ambitions to become an EV production hub and in 2020 banned export of raw nickel to keep supply at home, in an effort to entice foreign investors to set up production facility in Indonesia.
The AGO said the companies allegedly involved were mining on 157 hectares (387.96 acres) of land that was part of a concession belonging to state mining company Aneka Tambang (Antam), resulting in big losses in state revenue.
An Antam spokesperson did not immediately respond to Reuters queries.
($1 = 15,190.0000 rupiah)
(Reporting by Fransiska Nangoy; Editing by Martin Petty)
