Draft Guidelines for Licensing of Nonmetal Mineral and Rock Mining Business Activities Regulation

• Author: William A. Sullivan/Christian Teo Purwono & Partners
• Profession: Licensed Foreign Advocate in Indonesia as well as a Solicitor of the Supreme Court of New South Wales
• Pages: 323-345

CHAPTER 23

Draft Guidelines for Licensing

of Nonmetal Mineral and Rock

Mining Business Activities

Regulation

I. Executive Summary

1. Overview

1.1 An advanced draft of the Guidelines for Licensing Nonmetal Mineral

and Rock Mining Business Activities Regulation has been circulated

(hereinafter referred to as “Draft NM&R Licensing Guidelines

Regulation”) by way of the intended eventual implementation of

Article 27(2) of the 2009 Mining Law.

1.2 At this time, it is not possible to say when the Draft NM&R Licensing

Guidelines Regulation will be finalized and issued.

2. Approach

2.1 IUP Issuance Procedures: The issuance of IUPs for nonmetal

minerals and rocks involves two stages, namely (i) WIUP grant and

(ii) IUP grant.

2.2 WIUPs and IUPs may be granted to (i) a Business Entity, (ii) a

cooperative, or (iii) an individual.

2.3 IUPs are divided into two types, namely (i) Exploration IUPs, which

constitute permission to conduct a general investigation, exploration,

and a feasibility study; and (ii) Production Operation IUPs, which

constitute permission to conduct construction activities, refining and

processing, transportation, and sales.

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2.4 Business Entities, cooperatives, or individuals wanting to obtain a

WIUP for nonmetal minerals and rocks must submit an application to

the Relevant Government Authority.

2.5 Business Entities, cooperatives, or individuals that have established

WIUP boundaries and coordinates must submit an application for an

Exploration IUP to the Relevant Government Authority not later than

five working days after submission of a WIUP map and also meet

certain administrative, technical, environmental, and financial

requirements.

2.6 Production Operation IUPs, for nonmetal minerals and rocks, are

given to Business Entities, cooperatives, and individuals by way of

conversion or upgrade of Explorations IUPs for nonmetal minerals

and rocks to become Production Operation IUPs.

2.7 Business Entities, cooperatives, or individuals that have received the

WIUP map boundaries and coordinates must provide a Guarantee of

Seriousness Deposit before applying for an Exploration IUP.

2.8 IUP Holder Obligations: The Draft NM&R Licensing Guidelines

Regulation specifies a number of obligations that need to be fulfilled

by IUP holders.

2.9 Exploration IUP holders have one year to complete a general

investigation of the whole IUP area. Exploration IUP holders must

carry out their exploration activities using proper technical proce-

dures. Not later than the end of the exploration period, the holder of

an Exploration IUP may undertake a feasibility study after delivering

to the Relevant Government Authority a full exploration report and

obtaining approval of the RKTTL and RKAB from the Relevant

Government Authority.

2.10 Construction activities must be based on and otherwise be by way of

implementation of the approved feasibility study, AMDAL, RKAB,

and RKTTL. Construction activities are to be conducted in accor-

dance with standard engineering and related procedures and,

wherever possible, using local goods, labor and services.

2.11 Once the holder of a Production Operation IUP has completed at

least 70% of all mine facilities and support facilities, as well as the

installation of all necessary equipment, the IUP holder may com-

mence mining, processing, refining, transportation, and sales

activities.

2.12 Production Operation IUP holders may also have the processing,

refining, sales, and transportation activities performed by other

parties that hold (i) Special Production Operation IUPs for Proces-

sing and Refining or (ii) Special Production Operation IUPs for Sales

and Transportation as the case may be.

324 Mining Law & Regulatory Practice in Indonesia