Increase of Added Value of Minerals through Processing and Refining of Minerals Regulation

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
Increase of Added Value of
Minerals through Processing and
Rening of Minerals Regulation
I. Executive Summary
1. Overview
1.1 The Minerals Added Value Regulation (hereinafter referred to as
MoEMRR 7/2012) was issued with legal effect from February 6,
2012, and by way of the implementation of Articles 102 and 170 of the
2009 Mining Law and Article 96 of GR 23/2010, which provide that
IUP (i.e., mining license) holders are (i) obliged to carry out proces-
sing and rening of mineral products in Indonesia and (ii) prohibited
from exporting mining products before local processing and rening
has taken place.
1.2 MoEMRR 7/2012 will effectively ban the export, from Indonesia, of
mineral products (other than coal) that have not undergone any or
sufcient domestic processing and rening in Indonesia to meet the
minimum value added specications set out in a schedule to MoEMRR
2. Approach
2.1 Cut-Off Date for Unp rocessed Minera l Exports: Not later than
May 2012, exporters must be able to show that either some local
processing and rening is taking place or there is a credible plan in
place to ensure full lo cal processing and re ning by 2014/2015
while full local processing rening must take place not later than
2.2 Relevant Minerals: MoEMRR 7/2012 applies to:
a. Metal minerals;
b. Nonmetal minerals; and
c. Rocks; but
d. Not coal.
2.3 The metal minerals only covered by the domestic processing and
rening requirement are:
a. Copper;
b. Gold;
c. Silver;
d. Lead;
e. Timbal and zinc;
f. Chromium;
g. Molybdenum;
h. Platinum group metals;
i. Bauxite;
j. Iron ore;
k. Iron sands;
l. Nickel and/or cobalt;
m. Manganese; and
n. Antimony.
2.4 Administration: The minimum domestic and processing require-
ment for each of the specied minerals and rocks is set out in a
schedule to MoEMRR 7/2012.
2.5 It is the responsibility of the exporter to ensure that the minimum
level of domestic processing and rening has been carried out.
2.6 The domestic processing and rening may, however, be carried out
by any of:
a. The producer (as the holder of a Production Operation IUP or
b. A specialist third-party processor and rener (as the holder of a
Special Production Operation IUP/IUPK for Processing and
Rening); or
c. Various other approved and licensed parties.
2.7 Mineral products (covered by MoEMMRR 7/2012) that do not meet
the minimum processing and rening specications may not be
exported from Indonesia. Such mining products may, however, still be
sold domestically.
3. Sanctions
Producers that fail to meet the minimum domestic processing and rening
requirement are also liable to administrative sanctions that may ultimately
result in the cancellation of their IUPs.
174 Mining Law & Regulatory Practice in Indonesia

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