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.

Grantor

Condition

MoEMR (Minister of Energy and Mineral Resources)

  • the mining commodities to be processed are from other provinces outside the location of the processing and/or refining facilities;
  • the mining commodities to be processed are from abroad; and/or
  • the processing and refining facilities are located across provinces.

Governor

  • the mining commodities to be processed are from the same province as the location of the processing and/or refining facilities; and/or
  • the location of the processing and/or refining facilities is within one province.

Grantor

Condition

MoEMR (Minister of Energy and Mineral Resources)

If the transportation and sales are made across province and/or nation.

Governor

If the transportation and sales are made in 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.

Rights

Obligations

Prohibitions

  • To buy, transport, and sell the mineral and coal mining commodities from and to IUP holders (i.e. holders of IUP-OPs, IUPK-OPs, IUP-OP Specifically for Processing and/or Refining, IPRs, CoWs, CCoWs, and other holders of IUPOPs Specifically for Transportation and Sales); and
  • To construct and/or use the transportation and sales facilities and infrastructure, including stockpiles, ports, or special ports, in accordance with the provisions of the laws and legislation.
  • To send a copy of the agreements/contracts with IUP holders;
  • To comply with the legislation in the fields of traffic and road traffic, if the holder uses public road facilities, which includes complying with the load capacity level requirements that are adjusted with the class of the road, the traffic of the road, and the traffic accident risks;
  • To file a periodic report of the business operations to the MoEMR or the Governor every three months, or whenever it is needed;
  • To file a report on the Verification Results that are issued by the surveyor on a monthly basis to the MoEMR or the Governor, no later than ten days after the end of the month.
  • To perform any transportation or sales activities relating to any mineral or coal commodities that have not originated from the areas of IUP holders (i.e. holders of the IUP-OP, IUPK-OP, IUP-OP Specifically for Processing and/ or Refining, IPR, CoW, CCoW, and any other holders of the IUPOP Specifically for Transportation and Sales);
  • To perform any transportation or sales activities relating to any mineral or coal commodities between provinces and/or states for the holder of an IUP-OP Specifically for Transportation and Sales that has been issued by the Governor;
  • To purchase mineral or coal commodities in the mine mouth;
  • To transfer the IUP to another party; and
  • To have an IUP, IPR, IUPK, or IUPOP Specifically for Processing and/or Refining.

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