The Long Awaited Coal and Mining Business Activities Amendment

Government Regulation No. 24 of 2012 (“Regulation”) on the Amendment to Government Regulation No. 23 of 2010 (“2010 Regulation”) on the Implementation of Coal and Mineral Mining Business Activities was issued to re-organize the process for issuing mining licenses for non-metal and rock minerals.

The changes to the 2010 Regulation are expected to give Indonesians a better chance to participate in coal and mineral mining business activities. The Regulation is also expected to provide legal certainty for work contract and coal mining work agreement holders that intend to extend their agreements as Mining Licenses (Izin Usaha Pertambangan – “IUP”).

The Regulation adds two provisions to Article 6 of the 2010 Regulation. The first provision stipulates that the term “private business entities” (“business entities”) includes both business entities in the framework of domestic capital investment, and business entities in the framework of foreign capital investment. The second provision addresses IUPs. Under this provision, IUPs proposed by business entities in the framework of foreign capital investment can only be issued by the Minister of Energy and Mineral Resources (“the Minister”).