Mining Business Licence for Production Operation (Ijin Usaha Pertambangan Operasi Produksi / IUP OP)

An IUP-OP is a mining business licence that is granted for performing production operation activities (i.e. construction, mining, processing and/or refining, transportation, and sales) within a WIUP.

Mining Business License for Production Operation (3 different types)

An IUP-OP is a mining business licence that is granted for performing production operation activities (i.e. construction, mining, processing and/or refining,
transportation, and sales) within a WIUP.

An IUP-OP Specifically for Processing and/or Refining is a mining business licence that is granted specifically for purchasing, transporting, processing, and refining, as well as selling mineral and coal commodities.

An IUP-OP Specifically for Transportation and Sales is a mining business licence that is granted specifically for purchasing, transporting, and selling mineral and coal commodities.

Ownership of IUP-OP (Mining Business License for Production Operation)

IUP-OP

Business entities

IUP-OP

Cooperatives

IUP-OP

Individuals*

Note: An IUP-OP Specifically for Processing and/or Refining of metal minerals, non-metal minerals, and coal can only be granted to business entities, while for rocks, an IUP-OP Specifically for Processing and/or Refining can be granted to business entities, cooperatives, and individuals.

Authority to Issue IUP-OP

Grantor

Condition

MoEMR (Minister of Energy and Mineral Resources)

If the mining location, processing and/or refining location, as well as the special port location are located:

  1. across provinces; or
  2. directly adjacent to another country.

The IUP-OP is also granted by the MoEMR if:

  1. the application of the IUP-OP is made by a listed/public company; and
  2. the application of the licence is made for more than one metal mineral or coal IUP

Governor

If the mining location, processing and/or refining location, as well as the location of the special port are within one province.

License Terms and Extensions

IUP-OP

Rights, Obligations and Prohibitions of Holders of IUP-OP

Rights

Obligations

Prohibitions

  • To process and/or refine mining commodities from the holders of:
  1. IUP-OPs;
  2. IUPK-OPs;
  3. IUP-OPs Specifically for Processing and/or Refining;
  4. IPRs;
  5. IUP-OPs Specifically for Transportation and Sales;
  6. CoWs; and
  7. CCoWs.
  • To mix mine commodity products in order to meet the buyer’s specifications;
  • To utilise public facilities and/or infrastructure in order to support business activities, in accordance with the provisions of the legislation; and
  • To enter into cooperative agreements with other parties for the utilisation of the residual and/ or by-products of the processing and/or refining products for domestic industrial raw materials.
  • To obtain approval for the use of foreign workers, from the agencies that administer the affairs in the field of manpower;
  • To comply with the restrictions on processing and/or refining, in order to conduct overseas sales in accordance with the provisions of the legislation;
  • To prepare and submit the annual RKAB to the MoEMR or the Governor, in order to obtain the necessary approval;
  • To obtain approval for any changes in investment and financing sources, including changes in paid-up capital;
  • To prioritise the utilisation of local manpower, goods, and services in the country;
  • To comply with the benchmark prices for mineral or coal sales, in accordance with the provisions of the legislation;
  • To prepare, implement, and submit reports on the implementation of any community development and empowerment programmes;
  • To prioritise the fulfilment of mineral and coal needs in the country; and
  • To obtain approval from the MoEMR or the Governor for any changes to shareholders and the Boards of Directors/ Commissioners.
  • Undertake the processing and/ or refining of mining products that have not originated from the holders of:
  1. IUP-OPs;
  2. IUPK-OPs;
  3. IUP-OPs Specifically for Processing and/ or Refining;
  4. IPRs;
  5. IUP-OPs Specifically for Transportation and Sales;
  6. CoWs; and
  7. CCoWs.
  • To have the an IUP, IPR, or IUPK, or IUJP; and
  • To transfer the IUPOP Specifically for Processing and/or Refining to another party.

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