Background

As explained in Article 1 (32) of Law No. 4 of 2009 on Mineral and Coal Mining (“Mining Law“), Small Scale Mining Area means a part of the mining zone (wilayah pertambangan) where small scale mining activities are performed. These areas are determined by the mayors/municipal governments after consulting with the Regional House of Representatives of district or cities (Dewan Perwakilan Rakyat Daerah Kabupaten/Kota). Article 22 of Mining Law lays down a few criteria that guides the determination/designation of Small Scale Mining Area, which would be publicly announced by the relevant mayors/municipal governments. Those are:

1.  The presence of secondary mineral reserves in the river, and/or in the riverside;

2.  The presence of primary metal/coal reserves within the maximum depth of 25 meters;

3.  The presence of terrace deposits, floodplain, and paleochannel deposits (endapan sungai purba);

4.  Maximum width of 25 hectares for Small Scale Mining Area;

5.  The type of commodity which is intended to be mined; and/or

6.  Small Scale Mining Area which has been mined for at least 15 (fifteen) years.

Procedures in Obtaining Permit for Public Mining

Any Small Scale Mining Area is granted by mayors/municipal governments based on a request by any of the local residents, either individually, in-group or by cooperative . Article 48 of the Government Regulation Number 23 of 2010 on the Implementation of Mineral and Coal Mining Business Activities (“GR 23/2010“) lists 3 requirements that an applicant has to fulfill in order to obtain a permit.

1.  Administrative requirement;

2.  Technical requirement; and

3.  Financial requirement.

With regard to administrative requirement:

1.  For individuals, the following list of items must be prepared and submitted:

1.  An application letter;

2.  Social identification number (kartu tanda penduduk);

3.  Specification of the type of commodity intended to be mined; and

4.  A certificate from the local office of urban administrative division/office of rural administrative division.

2.  For groups:

1.  An application letter;

2.  Specification of the type of commodity intended to be mined; and

3.  A certificate from the local office of urban administrative division/office of rural administrative division.

3.  For unions:

1.  An application letter;

2.  Tax Number;

3.  A copy of the deed of establishment which has been legalized by an authorized government official;

4.  Specification of the type of commodity intended to be mined; and

5.  A certificate from the local office of urban administrative division/office of rural administrative division.

The technical aspect requires submission of a letter of statement, which at least contains:

1.  A well in the Small Scale Mining Area with the maximum depth of 25 meters;

2.  The possession of mechanical pumps, and necessary machinery with maximum scale of 25 horsepower for one Small Scale Mining Permit; and

3.  No use of heavy equipment and explosives.

The financial aspect requires the submission of a financial report covering the last one-year of business activities, applicable only to cooperative.

Johan Kurnia