Special Mining Business License (Ijin Usaha Pertambangan Khusus / IUPK)

There are two type of IUPK: Exploration Special Mining Business Licence (“Exploration IUPK”) and Special Mining Business Licence for Production Operation (“IUPK-OP”) 

Exploration IUPK and IUPK-OP

IUPK

Exploration IUPKs

An Exploration IUPK is a mining business licence that is granted for the performance of general surveys, exploration, and feasibility studies within a WIUPK.

IUPK

IUPK-OPs

An IUPK-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 WIUPK.

Ownership of IUPK (Special Mining Business License)

IUP-OP

Business entities

Authority to Issue IUJP

IUJP Ijin Usaha Jasa Pertambangan

Ministry of Energy and Mineral Resources (MoEMR)

Exploration IUPK and IUPK-OP can only be granted by the MoEMR.

Licence Terms and Extensions

IUPK

Exploration IUPKs

The license term for Coal is max. 7 Years, Metal Minerals max. 8 years. Applications to change an Exploration IUPK to an IUPK-OP should be submitted no later than six months before the expiration of the Exploration IUPK.

IUPK

IUPK-OPs

The license term is max. 20 years (for Coal and Metal Materials), while the extension is 2 X 10 years. Applications for extensions of licences should be submitted no earlier than five years and, at the latest, one year prior to the expiration of the IUPK-OP

Rights, Obligations and Prohibitions of Holders of IUPK

Rights:

  1. To build the facilities and/or infrastructure supporting the mining business activities;
  2. To conduct the mining business activities at a WIUP or a WIUPK in accordance with the
    provisions of the laws and regulations;
  3. To obtain the rights to the land, in accordance with the provisions of the legislation;
  4. To have the minerals, including the associated minerals or coal that have been produced, after fulfilling the production dues, except for the radioactive minerals;
  5. To sell the minerals or coal, including selling overseas after the fulfilment of domestic needs, and selling minerals or coal that have been excavated during exploration activities or feasibility study activities, in accordance with
    the provisions of the legislation;
  6. To use foreign workers in accordance with the approval of the agencies that administer affairs in the field of manpower, in accordance with the provisions of the legislation;
  7. To make any changes to investment and financing sources, including charges of paid-up capital, and place them in accordance with the
    approval of the annual RKAB;
  8. To apply to the Minister or Governor, in accordance with the correct authority,
    for an IUP or IUPK in order to search for other mining commodities in the WIUP or WIUPK, by
    forming a new Business Entity in accordance with the provisions of the
    legislation;
  9. To propose a request to use the area outside the WIUP or WIUPK to the MoEMR or Governor
    in order to support the mining activities;
  10. To build the transport facilities, and the storage/
    stockpiling facilities, and to purchase and use explosives in accordance with the approval of the annual RKAB.

Obligations:

  1. To conduct all of the mining business activities in accordance with the provisions of the legislation;
  2. To prepare and submit an annual RKAB to the MoEMR or the Governor;
  3. To prioritise the fulfilment of coal and mineral needs in the country, and to adhere to the controls over production and sales;
  4. To prepare and obtain approval for reclamation and post-mining plans and to introduce reclamation and post-mining guarantees;
  5. To increase the added value of mineral or coal
    mining products in the country, in accordance with the provisions of the laws and regulations;
  6. To prepare, implement, and submit reports on
    the implementation of the community development and empowerment programmes;
  7. To submit all of the data that was obtained from the activities of the exploration and production operations to the MoEMR or the Governor;
  8. To prioritise the utilisation of local manpower, goods, and services in the country, in accordance with the provisions of the legislation;
  9. For PMA IUP and IUPK holders, to divest shares to Indonesian participants, in accordance with the provisions of the legislation; and
  10. To pay the necessary financial obligations, in accordance with the laws and regulations;
  11. To obtain approval from the MoEMR or the Governor for any changes to shareholders and the Boards of Directors/Commissioners;
  12. To pay adequate compensation to the relevant communities, in the event of any errors in the conduct of the mining business activities that have a directly negative impact on those communities.

Prohibitions:

  1. To sell mining products that have not been produced by its own mining concession;
  2. To sell the mining products abroad, before processing and/or refining them in this country;
  3. To engage subsidiaries and/or affiliates as mining service providers, without receiving approval from the DGoMC on behalf of the MoEMR;
  4. To perform blending activities for coal originating from the holders of an IUPOP, IUPK-OP or an IPR, without receiving approval from the DGoMC or governors in accordance with their authority;
  5. To perform the processing and/or refining of the mining products, without having the IUP, IPR, or IUPK;
  6. To have an IPR, an IUP-OP Specifically
    for Processing and/or Refining, an IUPOP Specifically for Transportation and Sales, and an IUJP;
  7. To pledge the IUP/IUPK and/or mining commodities to other parties;
  8. To perform a general inspection and exploration, and to conduct a feasibility study, before the annual RKAB for the Exploration IUP is approved;
  9. To perform any construction, mining, processing and/or refining activities, as well as any transportation and sales activities, including advanced exploration, before the annual RKAB for the IUP-OP is approved;
  10. To perform mining business activities in areas that are prohibited by the legislation;
  11. To transfer the IUP/IUPK to another party, without the prior consent of the MoEMR or the Governor;
  12. To conduct a transfer of shares, so that the BUMN and/or BUMD ownership share in a business entity which holds an IUPK becomes less than 51% for the IUPK which is owned by a BUMN and/or BUMD.

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