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Indonesian Government Regulation on the Implementation of Mining Business Activities

Government Regulation Number 96 of 2021 concerning the Implementation of Mining Business Activities, regulates minerals and coal.

Mining is part or all of the stages of activities in the framework, management and exploitation of minerals or coal which include general investigation, exploration, feasibility studies, construction, mining, processing and/or refining or development and/or utilization, transportation and sales, as well as post-mining activities.

Indonesian Government Regulation on the Implementation of Mining Business Activities

Minerals are inorganic compounds that occur in nature, which have certain physical and chemical properties as well as regular crystal arrangements or combinations thereof that form rock, either in loose or solid form.

Coal is a naturally occurring carbonaceous organic compound deposit from plant residues.

Mineral Mining is Mining of a collection of Minerals in the form of ore or rock, excluding geothermal, oil and gas, and groundwater.

Coal Mining is the mining of carbon deposits found in the earth, including solid bilumen, peat, and asphalt rock.

Mining Business is an activity within the framework of Mineral or Coal business which includes the stages of general investigation, exploration, feasibility study, construction, mining, processing and/or refining or development and/or utilization, transportation and sales, as well as post-mining activities.

The granting of a Mining Business License Area (WIUP) consists of:

a. Radioactive Mineral WIUP.

b. Metal mineral WIUP;

c. Coal Mining Permit Areas;

d. Non-metallic lVlineal WIUP;

e. Minerai Minerai certain types of non-metal; and

f. WIUP rock.

So that in running a mining business it becomes legal, it is necessary to take care of business permits.

Business Licensing is the legality granted to business actors to start and run their businesses and/or activities.

Business permits granted to mining businesses are as follows:

  1. Mining Business Permit, hereinafter referred to as IUP, is a permit to carry out Mining Business.
  2. People's Mining Permit, hereinafter referred to as IPR, is a permit to carry out Mining Business in a people's mining area with a limited area and investment.
  3. Special Mining Business License, hereinafter referred to as IUPK, is a permit to carry out Mining Business in the area of ​​a special mining business permit.
  4. Rock Mining Permit, hereinafter referred to as SIPB, is a permit granted to carry out mining business activities of certain types or for certain purposes.
  5. IUPK as Continuation of Contract/Agreement Operation is a business license granted as an extension after the completion of the Contract of Work or Coal Mining Concession Work Agreement.
  6. Transportation and Sales Permit is a business license granted to a company to buy, transport, and sell Mineral or Coal mining commodities.
  7. Mining Services Business License, hereinafter referred to as IUJP, is a permit granted to conduct core mining services business activities related to the stages and/or parts of Mining Business activities.

Mining Business Permit (IUP)

Administrative requirements at least include:

  1. application letter;
  2. trying number in the event of data updating; and
  3. composition of management, list of shareholders or capital, and list of beneficial owners.

The minimum technical requirements include:

  1. final Exploration report; and
  2. data source and backup.

Environmental requirements at a minimum include:

  1. report on the implementation of Reclamation activities; and
  2. proof of placement of Reclamation guarantees.

Financial requirements at least include:

  1. financial statements for the last 3 (three) years that have been audited by a public accountant;
  2. fiscal certificate in accordance with the provisions of the legislation in the field of taxation; and
  3. proof of payment of fixed contributions for the last 3 (three) years.

People's Mining Permit (IPR)

To get an IPR, the applicant must meet the requirements, which consist of:

a. individuals, including:

  1. application letter;
  2. trying main number;
  3. a copy of the identity card;
  4. a certificate from the local village kelurahan stating the applicant is a local resident;
  5. a statement of ability to comply with the provisions of laws and regulations in the field of environmental protection and management and Mining safety; and
  6. fiscal certificate in accordance with the provisions of the legislation in the field of taxation.

b. Cooperatives, including:

  1. application letter;
  2. henrsaha identification number;
  3. a copy of the identity card of the cooperative management;
  4. a certificate from the local kelurahan/village stating that all management of the Cooperative are local residents;
  5. a statement of ability to comply with the provisions of laws and regulations in the field of environmental protection and management as well as mining safety; and
  6. fiscal certificate in accordance with the provisions of the legislation in the field of taxation.

The IPR is granted for a maximum period of 10 (ten) years and can be extended 2 (two) times for 5 (five) years each.

Special Mining Permit (IUPK)

Administrative requirements, at least include:

  1. application letter;
  2. trying number in the event of data updating; and
  3. composition of management, list of shareholders, and list of beneficial owners of BUMN, BUMD, or private business entity.

Technical requirements, at least include:

  1. final Exploration report; and
  2. resource and backup data.

Environmental requirements, at least include:

  1. report on the implementation of Reclamation activities; and
  2. proof of placement of the Reclamation guarantee.

Financial requirements, at least include:

  1. financial statements for the last 3 (three) years that have been audited by a public accountant;
  2. fiscal certificate in accordance with the provisions of the legislation in the field of taxation; and
  3. proof of payment of fixed contributions for the last 3 (three) years.

IUPK as Continuation of Contract/Agreement Operation

Administrative requirements include:

  1. application letter;
  2. trying main number; and
  3. composition of management, list of shareholders, and list of beneficial owners of Business Entities from KK or PKP2B holders.

Technical requirements include:

  1. the approved development plan for the whole area of ​​the territory that contains at least a map and the boundaries of the coordinates of the area;
  2. the approved coal Development and/or Utilization plan for pKp2B holders;
  3. balance of resources and reserves; and
  4. plans for the development of facilities and infrastructure to support Production Operation activities located within the WIUPK or outside the WIUPK.

Environmental requirements, including:

  1. approval of environmental documents issued by the competent authority in accordance with the provisions of laws and regulations; and
  2. Reclamation plan documents and Post-mining plans.

Financial requirements include:

  1. financial statements for the last 3 (three) years that have been audited by a public accountant;
  2. proof of payment of fixed fees and production fees for the last 3 (three) years; and
  3. fiscal certificate in accordance with the provisions of the legislation in the field of taxation.

Rock Mining Permit (SIPB)

Administrative requirements, including:

  1. application letter;
  2. trying main number;
  3. composition of management, list of shareholders or capital, and list of beneficial owners of BUMD/village-owned enterprises, private business entities in the context of domestic investment, cooperatives, or individual companies; and
  4. a copy of the contract/agreement on the implementation of development projects financed by the Central Government or Regional Governments for SIPB applications for certain purposes.

Technical requirements in the form of a statement not to use explosives in mining business activities.

Environmental requirements in the form of a statement of ability to comply with the provisions of laws and regulations in the field of environmental protection and management.

Financial requirements in the form of financial statements for the last 1 (one) year which have been audited by a public accountant.

In addition to the requirements mentioned above, the applicant must submit the coordinates and area of ​​a certain type of rock or for certain purposes requested.

SIPR for certain rock types is granted for a maximum period of 3 (three) years and can be extended 2 (two) times for 3 (three) years each.

Transport and Sales Permit

To obtain a Transport and Sales Permit, the applicant must meet the following requirements:

  1. application letter;
  2. trying main number;
  3. composition of management, list of shareholders or capital, and list of beneficial owners of Business Entities, Cooperatives, or individual companies; and
  4. source of supply of Mineral or Coal as evidenced by a copy of a memorandum of understanding or cooperation agreement for the Transport and Sales of Mineral or Coal that is still valid with the holder:

a. IUP;
b. IUPK;
c. IUPK as Continuation of Contract/Agreement Operation;
d. IPR.;
e. SIPB;
f. KK;
g. PKP2B; and/or
h. Other Transport and Sales Permits.

Mining Services Business License

Mining Service Companies carry out Mining Services business activities with the following types of business:

  1. General Investigation;
  2. Exploration;
  3. Feasibility study;
  4. Mining Construction;
  5. Transportation;
  6. Mining environment;
  7. Reclamation and Post-mining;
  8. Mining safety; and/or
  9. Mining

Mining Services business activities consist of:

a. consultation;
b. planning; and ,
c. implementation.

Consultation and planning activities are carried out after meeting the licensing requirements

Endeavor in the form of a standard certificate. And for implementation activities carried out after obtaining the IUJP.

For more details on mining business activities, see Government Regulation Number 96 of 2021 concerning the Implementation of Mining Business Activities, which can be viewed and downloaded here.