2009 Mining Law

AuthorWilliam A. Sullivan/Christian Teo Purwono & Partners
ProfessionLicensed Foreign Advocate in Indonesia as well as a Solicitor of the Supreme Court of New South Wales
2009 Mining Law
I. Executive Summary
1. Overview
1.1 The Mineralsand Coal Mining Law (hereinafter referredto as the 2009
Mining Law) was issued with legaleffect from January 12, 2009.
1.2 The mining regulatory regime contemplated by the 2009 Mining Law
is materially different from that which prevailed prior to 2009.
1.3 The 2009 Mining Law has now been amended by GR 24/2012. See
Chapter 16 for details of GR 24/2012.
2. Approach
2.1 Mining Area: The 2009 Mining Law contemplates that the Gov-
ernment Authority may designate specic geographic areas of land
as WUPs, WPRs, or WPNs.
2.2 WUPs include WIUPKs.
2.3 Licenses: IUPs may be issued in respect of WUPs while IUPKs may be
issued in respect of WIUPKs. IPRs may be issued in respect of WPRs.
2.4 Although not clear from the wording of the 2009 Mining Law itself, it
is envisaged that the IUP will be the form of Mining Business License
routinely granted for small and medium-size mining projects, while
the IUPK will be the form of Mining Business License reserved for
occasional, large-scale mining projects that are determined to have
national strategic importance.
2.5 In order to carry on mining projects that are not of national strategic
importance, it is necessary to both (i) be granted a WIUPK and
(ii) obtain an IUP.
2.6 For the rst time, the 2009 Mining Law allows a PMA Mining Com-
pany to hold a Mining Business License (IUP and IUPK).
2.7 There are two types of IUP and IUPK, namely (i) Exploration IUP/
IUPKs and (ii) Production Operation IUP/IUPKs.
2.8 Method of Issuance: Exploration IUPs are issued on the basis of
application or tender depending on the type of mineral involved, while
Production Operation IUPs are issued as an upgrade of Exploration IUPs
or on the basis of tender to a Business Entity, cooperative or individual that
or who has obtained feasibility study report data from the Government.
2.9 Obligations: An IUP holder is obliged to carry out, in Indonesia,
processing and rening activities related to the mining products
produced by it in Indonesia.
2.10 Commencing in the fth year of production, the holder of an IUP/
IUPK must divest part of its foreign shareholding (if any) to the
(i) GoI, (ii) Regional Government, (iii) BUMNs, (iv) BUMDs, or (v)
BUMSs (not including PMA Companies).
2.11 Mining Services Companies: Limitations are placed on the right of
holders of IUPs and IUPKs to cooperatewith Mining Services
2.12 IUP and IUPK holders are obliged to give preference to Localand
NationalMining Services Companies over OtherMining Services
Companies that are PMA Companies.
3. Transition
CoWs and CCoWs that were issued prior to the enactment of the 2009 Mining
Law, continue to be valid until their expiration date.
4. Amendments
Various provisions of the 2009 Mining Law have been subsequently amended
by GR 24/2012. See Chapter 16 for details of these amendments.
II. Details of Main Provisions
1. Mining Activities
Article Details
Articles 34
and 35
Mining activities are divided into the following categories:
a. Minerals mining which includes the mining of (i) radioactive
(ii) metal minerals,
(iii) nonmetal minerals,
(iv) rocks
; and
b. Coal mining.
The minerals falling within radioactive mineralsare specied in the Basic ML
Implementing Regulations.
The minerals falling within metal mineralsare specied in the Basic ML Imple-
menting Regulations.
The minerals falling within nonmetal mineralsare specied in the Basic ML
Implementing Regulations.
The minerals falling within rocksarespecied in the Basic ML Implementing Regulations.
26 Mining Law & Regulatory Practice in Indonesia

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