Obligation to Process and Refine Minerals Domestically

Minister of Energy and Mineral Resources has issued Regulation No. 7 of 2012 on Increasing Minerals Added-Value Through Processing and Refining Activities (“Regulation”). The Regulation implements Article 96 and 111 of Government Regulation No. 23 of 2010 on Mineral and Coal Mining Activities. These two articles mandate the issuance of a minister regulation to further stipulate provisions on increasing minerals added-value through processing and refining activities along with administrative sanctions.

Article 1 (16) defines “increasing added-value” as an activity to improve the value of mineral products, resulting to create economic, social, and cultural benefit. Minerals product that applies under the Regulation are metals, non-metal minerals, and rocks/stones. The commodities, pursuant to Article 3 (4) range from copper, gold, nickel- ore, zeolite, silicate, marble, onyx, and granite.