Regulation of the Minister of Energy and Mineral Resource R.I. Number 32 Year 2013 ( ‘Regulation 32/2013’) must be viewed in the context of Law Number 4 of 2009. Under the Law, a couple of articles refer to the guideline on granting a temporary permit for the Mining Production Operation. For this reason, it is necessary to stipulate Regulation 32/2013. This Regulation comes to force on the date it is enacted, which is 19 November 2013.

Under this Regulation, there are different types of licenses:

• Business License for Mining Exploration ( ‘IUP Exploration’).

This license will be granted for activities in the form of general investigation, exploration, and feasibility study. The holder of IUP is called ‘WIUP’.

• Special Business License for Exploration ( ‘IUPK Exploration’).

This license will be granted for the same activities as mentioned above but covered by the special business license for mining. The holder of IUPK is called ‘WIUPK’.

• License for People/Public Mining ( ‘IPR’).

This license will be granted for mining activities within the people/public mining area.

• Business License for Mining Production Operation specially meant for transporting and selling ( ‘IUP Production Operation specially meant for transport and selling’). This license will be granted to a company for purchasing, transporting, and selling mineral and coal mining commodities.
• Business License for Mining Production Operation meant for processing and/or refining ( ‘IUP Production Operation specially meant for processing and/or refining’). This license will be granted for transporting, processing and refining the mining activities.

Temporary permit for transporting and selling

If the holder of IUP Exploration or IUPK Exploration wants to exercise transporting and selling, he needs an (extra) temporary permit for those activities. He can submit an application to the Minister, Governor, or Regent/Mayor according to their authority. One of them will examine and evaluate the mineral or coal that has been mined when the application is complete. Based on the results of the evaluation, they shall make the decision whether or not to grand the temporary permit within 14 working days.

Business license for mining production operation for sale

A business entity that does not operate in mining business, needs an IUP Production Operation license for selling mined material. The IUP Production Operation for selling will be granted by the Minister, the Governor or the Regent/Mayor after submitting a request. The Minister, Governor, or Regent/Mayor will examine and evaluate the mined material. Just like in the previous paragraph, the Minister, Governor or the Regent/Mayor will make a decision based on the results of the evaluation within 14 working days.

Business license for Mining production operation specially meant for transporting and selling 

The holder of IUP Production Operation specially meant for transporting and selling activities may transport and sell mining commodities from the holder of:

–  IUP Production Operation

–  IUPK Production Operation

–  IUP Production Operation specially meant for processing and/or refining

–  IPR

To obtain IUP Production Operation specially meant for transporting and selling, there are some requirements on administrative, technical, environmental and financial level. If the application for IUP Production Operation is complete, the Minister, Governor, or Regent/Mayor shall conduct examination and evaluation. The final decision will be made based on the results of the evaluation within 14 working days. The IUP Production Operation specially meant for transporting and selling, must be granted for minimum 3 years and maximum 5 years and may be extended after 3 years.

If the holder intends to exercise transporting and selling mining commodities originated from companies than mentioned above, the holder is obliged to submit an application. He also is obliged to submit an application if he intends to increase the total capacity of transporting and selling activities.

Holders of IUP Production Operation specially meant for transporting and selling activities has the right to buy mining commodities, exercise transporting and selling activities of mining commodities he purchased, and construct and/or utilize facilities and infrastructure for transporting and selling activities. If the holder is intending to transport and sell the mineral or coal from Free on Board Barge or Free on Board Vessel existing at the port location must be supported by a statement letter for transporting and selling of mineral or coal from one of the holders, and a document with the buying party.

The holder of IUP Production Operation specially meant for transporting and selling activities is obliged to submit an Expenditure Work Program Budget ( ‘RKAB’) each year. The Minister, Governor, or Regent/Mayor shall evaluate the RKAB within at least 14 working days. There also is a possibility of extending the IUP Production specially meant for transporting and selling activities. To be eligible, there must among other things be a realization of RKAB during the last two years.

Business license for Mining Production Operation specially meant for processing and/or refining

The holder of IUP(K) Production Operation is obliged to process and/or refine with any company that has an IUP Production Operation specially meant for processing and/or refining activities. The IUP Production Operation specially meant for processing and/or refining will be issued by the Minister, the Governor or a Regent/Mayor.

To obtain IUP Production Operation specially meant for processing and/or refining, the company must first have a Provisional Permit. To obtain a Provisional Permit there are some requirements on administrative, technical, environmental and financial level. The Provisional Permit will be granted for the term of 3 years and may be extended once for 1 year maximum.

The holder can submit an application to the Minister, Governor, or Regent/Mayor according to their authority. One of them will instruct examination and evaluation on such application. Based on the results of the evaluation, they shall make the decision whether or not to grand the temporary permit within 14 working days. Every holder of Provisional Permit is obliged to prepare and submit RKAB on operational activities during the validity of the Provisional Permit for processing and/or refining. The Provisional Permit will be granted for a term of 3 years and may be extended once for 1 year maximum.

The holder that has completed the obligations referring the Provisional Permit can upgrade to IUP Production Operation by submitting an application. Again there are some requirements on administrative, technical, environmental and financial level. Based on the results of examination and evaluation, the Minister, Governor, or Regent/Mayor shall make a decision whether or not to grant or reject the application for IUP Production Operation specially meant for processing and/or refining.

The license shall be granted for 20 years, including them of construction for 2 years and may be extended for 10 years for each extension.

Administrative penalty

Subject to an administrative penalty are:

–  The holder of temporary permit for transporting and selling activities that violates the obligations as abovementioned.

–  The holder of IUP Production Operation for selling that violates the obligations as abovementioned.

–  The holder of Provisional Permit for processing and/or refining that violates the obligations as abovementioned.

–  The holder of IUP Production Operation specially meant for processing and/or refining that violates the obligations as abovementioned.

The administrative penalty shall be in the form of a written reminder, temporary termination of activity, or revocation of the temporary permit. The administrative penalty in the form of temporary termination of activities will be charged 2 months maximum.

Martine Kruitbos