- The government, acting through the Ministry of Energy and Natural Resources, has proposed requiring all mining companies which are currently holders of Production Operation Mining Business Licenses (Izin Usaha Pertambangan – “IUP”) and Special Production Operation Mining Business Licenses (“IUPK”) to implement advanced exploration on an annual basis along with the preparation of reserve resilience funds. The Director-General of Minerals and Coal, Bambang Gatot Ariyono, has determined that a sizeable fund will be required for high-risk exploration activities.
- Mr. Bambang also added that both the government and the House of Representatives (“DPR”) are currently deliberating a Draft Bill on Minerals and Coal Mining (“Draft Bill”) which will address these issues.
- Furthermore, the Draft Bill should also permit the transfer of IUP and IUPK to other parties, an activity which is currently prohibited under Law No. 4 of 2009 on Minerals and Coal Mining, provided that such transfers are permitted based on approvals which will be granted by the Minister of Energy and Natural Resources or by the relevant governor.
- A total of 13 main issues have been proposed for inclusion under the Draft Bill by the government and DPR, including the following matters: 1) Incentivization of mineral and coal-deposit exploration activities; 2) Integrated IUP and IUPK licensing terms; 3) Rock Mining Licenses (Surat Izin Penambangan Batuan/SIPB); and 4) Continuity of Contracts of Work (Kontrak Karya/KK) or Coal-Mining Business Working Agreements (Perjanjian Karya Pengusahaan Pertambanga Batubara/PKP2B). ANT
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