Uu minerba 4 2009

LAW OF THE REPUBLIC OF INDONESIA NUMBER 4 OF YEAR 2009

CONCERNING

MINERAL AND COAL MINING

THE PRESIDENT OF THE REPUBLIC OF INDONESIA

WITH THE BLESSING OF GOD THE ALMIGHTY

Considering: a. that mineral and coal contained in the jurisdiction of mining of

Indonesia constitutes non-renewable natural resources as

bestowed by God the Almighty which plays an important role

in satisfying life necessities of many people, therefore

management thereof must be controlled by the State to give real

added value for national economy in the efforts to reach a just

welfare and prosperity of the people.

b. that the business activities of mineral and coal mining are

mining business activities other than geothermal, petroleum and

natural gas and ground water play a significant role in

providing real added value to national economy growth and

regional development in a sustainable manner;

c. that by considering national and international progress, Law

Number 11 of Year 1967 concerning Main Provisions in Mining

is not suitable any longer thus an amendment to laws in mineral

and coal mining is required which is able to manage and exploit

mineral and coal potential independently, reliably,

transparently, competitively, efficiently, and environmentally

aware, to guarantee a sustainable national development.

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d. that pursuant to considerations as referred to in item 1, item b,

and item c, a Law concerning Mineral and Coal Mining needs to

be created;

In view of: Article 5 clause (1), Article 20 and Article 33 clause (2) and clause (3) of the

Constitution of the Republic of Indonesia of Year 1945;

With Joint Approval of

THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA

and

THE PRESIDENT OF THE REPUBLIC OF INDONESIA

HEREBY RESOLVES

To enact: LAW CONCERNING MINERAL AND COAL MINING

CHAPTER I

GENERAL TERMS

Article 1

As defined herein:

1. Mining shall be part or all phases of activity in the context of research, management,

and exploitation of mineral or coal covering general survey, exploration, feasibility

study, construction, mining, processing and refining, transportation and sales, and

post-mining activities.

2. Mineral shall be inorganic compound formed in nature, which has specific physical

and chemical properties and arranged crystal structure or combination thereof

forming rock, in loose or combined form.

3. Coal is a sediment of carbon organic compound formed naturally from remains of

plants.

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4. Mineral Mining shall be mining of a collection of minerals in form of ore or rock,

other than geothermal, petroleum and natural gas, and ground water.

5. Coal Mining shall be mining of carbon sediment located in the earth, including

solid bitumen, turf, and asphalt rock.

6. Mining business shall the activities in the context of research, management, and

exploitation of mineral or coal covering general survey, exploration, feasibility

study, construction, mining, processing and refining, transportation and sales, and

post-mining activities.

7. Mining Business Permit, hereinafter the Mining Business Permit (Izin Usaha

Pertambangan/IUP) shall be the permit to run mining business.

8. Exploration Mining Business Permit (IUP Eksplorasi) shall be a business permit

granted to execute the activity of genera survey, exploration, and feasibility study.

9. Production Operation Mining Business Permit (IUP Operasi Produksi) shall be a

business permit granted after completion of Exploration Mining Business Permit

(IUP Eksplorasi) to execute the phase of production operation activities. *

10. People's Mining Permit, hereinafter People's Mining Business Permit (Izin

Pertambangan Rakyat/IPR), shall be the permit to conduct mining business within

people's mining area under limited area and investment size.

11. Special Mining Business Permit, hereinafter Special Mining Business Permit (Izin

Usaha Pertambangan Khusus/IUPK) shall be the permit to run mining business in

the special mining business permit area.

12. Exploration Special Mining Business Permit (IUPK Eksplorasi) shall be a business

permit granted to execute the phase of activity of general survey, exploration, and

feasibility study within the special mining area business permit.

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13. Production Operation Special Mining Business Permit (IUPK Operasi Produksi)

shall be a business permit granted after completion of execution of Exploration

Special Mining Business Permit (IUPK Eksplorasi) to to execute the phase of

production operation activities in the special mining business permit area.

14. General Survey shall be the phase of activities of mining to find regional geology

condition and indication of presence of mineralization.

15. Exploration shall be the phase of mining business activity to find detailed and

precise information about location, shape, dimension, distribution, quality and

measured of materials, and information concerning social condition and the

environment.

16. Feasibility study shall be the phase of mining business activities to find detailed

information about all related aspects to find economy and technical feasibility of

mining business, including analysis about environment impact and post-mining

planning.

17. Production Operation shall be the phase of mining business activities covering

construction, mining, processing, refining, including transportation and sales, and

environment impact control facilities conforming to the result of feasibility study.

18. Construction shall be mining business activities to execute development of all

production operation facilities, including control of environment impact.

19. Mining shall be part of mining business activities to produce mineral and /or coal

and their trace minerals.

20. Processing and refining shall be mining business activities to improve the quality

of mineral and /or coal and to use and gain trace minerals.

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21. Transportation shall be a mining business activity to move minerals and /or coal

from the mine site and or processing and refining site to delivery site.

22. Sales shall be a mining business activity to sell the product of mineral or coal

mining.

23. Business Entity shall be every legal entity running business in mining established

based on Indonesian law and is domiciled within the territory of the Unitary State

of the Republic of Indonesia.

24. Mining Service shall be a support service relate do the mining business activities.

25. Environment Impact Statement (AMDAL), hereinafter AMDAL, shall be a study

about major and significant impact of a business and /or activity planned on an

environment required for decision making process about undertaking of a

business and /or activity.

26. Reclamation shall be an activity conducted during the phase of mining business to

arrange, recover, and fix environment and ecosystem quality to allow them to

function again according to their purpose.

27. Post mining activity, hereinafter post mining, shall be a planned, systematic, and

sustainable activity after the end of part or all of mining business activities to

recover natural environment and social functions according to local conditions at

all mining areas.

28. Community Empowerment shall be an effort to improve the people's capability,

both individually or collectively, to improve their life quality.

29. Mining Area, herein after Mining Area (Wilayah Pertambangan /WP) shall be areas

which have mineral and /or coal potential which are not bound by government

administrative boundary which constitutes a part of national space planning.

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30. Mining Business Area, hereinafter Mining Business Area (Wilayah Usaha

Pertambangan /WUP) shall be a part of the Mining Area (Wilayah Pertambangan

/WP) which has obtained availability of data, potential, and /or geology

information.

31. Mining Business Permit Area, hereinafter Mining Business Permit Area (Wilayah

Izin Usaha Pertambangan /WIUP) shall be areas granted for the holder of Mining

Business Permit (Izin Usaha Pertambangan/IUP).

32. People's Mining Area, hereinafter People's Mining Area (Wilayah Pertambangan

Rakyat /WPR) shall be part of the Mining Area (Wilayah Pertambangan /WP) where

people's mining business activities take place.

33. State Reserve Area, hereinafter State Reserve Area (Wilayah Pencadangan Negara

/WPN) shall be part of Mining Area (Wilayah Pertambangan /WP) reserved for

national strategic interest.

34. Special Mining Business Area, hereinafter Special Mining Business Area (Wilayah

Usaha Pertambangan Khusus /WUPK) shall be part of Mining Area (Wilayah

Pertambangan /WP) which can be exploited.

35. Special Mining Business Permit Area, hereinafter Special Mining Business Permit

Area (Wilayah Izin Usaha Pertambangan Khusus/WIUPK) shall be areas granted for

the holder of Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK).

36. The Central Government, hereinafter the Government, shall be the President of

the Republic of Indonesia who holds the power of Governance of the State of the

Republic of Indonesia as referred to in the Constitution of the State of the

Republic of Indonesia of Year 1945.

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37. The regional government shall be the governor, bupati (regent), or mayor, and

local apparatus as components of administration of regional governance.

38. The minister shall be the minister who administers government affairs in the

sector of mineral and coal mining.

CHAPTER II PRINCIPLE

AND OBJECTIVE

Article 2

Mineral and /oar coal mining shall be managed under the principle of:

a. benefit, fairness, and balance;

b. partiality to national interest;

c. participation, transparency, and accountability;

d. sustainability and environmentally-aware.

Article 3

In the context of support of sustainable national development, the objectives of

management of mineral an coal shall be:

a. to guarantee effectiveness of execution and control of mining business activities

which are effective, productive, and competitive;

b. to guarantee the benefit of mineral and coal mining in a sustainable and

environmentally aware manner;

c. . to guarantee availability of mineral and coal as raw materials and /or source of

energy for domestic needs;

d. to support and develop national capability to be more competitive at national,

regional, and international levels;

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e. to increase the income of local, regional community, and the state, and to create job

opportunities for optimum benefits of the people' welfare; and

f. to guarantee legal certainty in administering of mineral and coal mining business

activities.

CHAPTER III

POSSESSION OF MINERAL AND COAL MINING

Article 4

(1) Mineral and coal as non-renewable natural resource is a national asset possessed by

the state for optimum benefit of the people's welfare.

(2) Possession of mineral and coal by the state as referred to in clause (1) shall be under

administering by the Government and /or regional government.

Article 5

(1) For national interest, the Government, after a consult with the House of

Representatives of the Republic of Indonesia, may stipulate a policy of prioritizing

mineral and /or coal for domestic interest.

(2) The national interest as referred to in clause (1) can be made by control of

production and export.

(3) In running the control as referred to in clause (2) the Government holds the

authority to define production amount of each commodity per year for each

province.

(4) The regional government shall comply with the defined amount stipulated by the

Government as referred to in clause (3).

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(5) Further provisions concerning prioritizing of mineral and /or coal for domestic

interest as referred to in clause (1) and control of production and export as referred

to in clause (2) and clause (3) shall be regulated in a government regulation.

CHAPTER IV

AUTHORITY IN MANAGEMENT OF MINERAL AND COAL MINING

Article 6

(1) The Government's Authority in management of mineral and coal mining among

else shall be:

a. stipulation of national policy;

c. creation of laws;

c. stipulation of national standard, guidance, and criteria;

d. stipulation of national mineral and coal mining permit system;

e. stipulation of Mining Area (Wilayah Pertambangan /WP) which is made after a

coordination with the local government and consult with the House of

Representatives of the Republic of Indonesia;

f. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,

settlement of people's conflict, and supervision of mining business which

location is crossing province and /or ocean areas exceeding 12 (twelve) miles

from the shore line;

g. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,


mining location is within province and /or ocean areas exceeding 12 (twelve)

miles from the shore line;

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h. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,

settlement of people's conflict, and supervision of production operation mining

business which direct environment impact is crossing province and /or ocean areas

exceeding 12 (twelve) miles from the shore line;

i. grant of Exploration Special Mining Business Permit (IUPK Eksplorasi), and

Production Operation Special Mining Business Permit (IUPK Operasi Produksi);

j. evaluation of Production Operation Mining Business Permit (IUP Operasi Produksi

/IUPOP) issued by the regional government which has caused environment

damage and did not apply good mining rules;

k. stipulation of production, marketing, utilization, and conservation policies;

l. stipulation of collaboration, partnership, and people's empowerment policies;

m. formulation and stipulation of non-tax state income from mineral and coal mining

business revenue;

n. assistance and supervision of administering of mineral and coal mining

management run by the regional government;

o. assistance and supervision of formulation of regional regulation in mining;

p. inventory, investigation, and research and exploration in the context to acquire

data and information on mineral and coal as the materials to devise (Wilayah Usaha

Pertambangan Khusus /WUPK) and State Reserve Area (Wilayah Pencadangan Negara

/WPN);

q. management of geological information, mineral resource and coal potential

information, and mining information at national level;

r. assistance and supervision on post mining land reclamation;

s. stipulation of national level mineral and coal resource balance;

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t. development and improvement of added value of mining business activities; and

u. improvement of the capability of the apparatus of the Government, provincial

government, and regency (kabupaten) /municipality government in administering

of mining business management.

Article 7

(1) The regional government's authority in management of mineral and coal mining

among else shall be:

a. creation of regional laws;

b. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,


location is crossing kabupaten (regency)/municipality and /or ocean areas in 4

(four) miles to 12 (twelve) miles;

c. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,

settlement of people's conflict, and supervision of production operation mining

business which activity is crossing kabupaten (regency)/municipality and /or

ocean areas in 4 (four) miles to 12 (twelve) miles;

d. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), assistance,

settlement of people's conflict, and supervision of mining business which direct

environment impact is crossing kabupaten (regency)/municipality and /or

ocean areas in 4 (four) miles to 12 (twelve) miles

e. inventory, investigation, and research and exploration in the context to acquire

data and information on mineral and coal conforming to its authority;

f. management of geological information, mineral and coal resource potential

information, and mining information at regional /local level;

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g. devise of mineral and coal resource balance at provincial region/ area level;

h. development and improvement of added value of mining business activities in

the province;

i. development and improvement of people's participation in the mining business

by taking into account preservation of the environment;

j. coordinating the permitting and supervision of utilization of explosives in

mining area in accordance with their authority;

k. delivering information concerning the result of inventory, general survey, and

research and exploration to the Minister and regent (bupati) /mayor;

l. delivering information concerning the result of production, domestic and

export sales to the Minister and regent (bupati) /mayor;

m. assistance and supervision on post mining land reclamation;

n improvement of the capability of the apparatus of the provincial government

and regency (kabupaten) /municipality government in administering of mining

business management.

(2) The provincial government's authority as referred to in clause (1) shall be exercised

pursuant to the provisions of laws and legislations.

Article 8

(1) The authority of the regency /municipality government in management of mineral

and coal mining among else shall be:

a. creation of regional laws;

b. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), People's Mining

Business Permit (Izin Pertambangan Rakyat/IPR) assistance, settlement of people's

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conflict, and supervision of mining business within the area of the regency

(kabupaten) /municipality and /or ocean area within 4 (four) miles;

c. grant of Mining Business Permit (Izin Usaha Pertambangan/IUP), People's Mining

Business Permit (Izin Pertambangan Rakyat/IPR) assistance, settlement of people's

conflict, and supervision of production operation mining business which

activity is located within the territory of the regency (kabupaten) /municipality

and /or ocean area within 4 (four) miles;

d. inventory, investigation and research, and exploration in the context to acquire

data and information on mineral and coal;

e. management of geological information, mineral and coal resource potential

information, and mining information at kabupaten (regency) /municipality

level;

f. a devise of mineral and coal resource balance in the kabupaten (regency)

/municipality level;

g. development and empowerment of the local people in mining business by

taking into account preservation of the environment;

h. development and improvement of added value and benefit of mining business

activities optimally;

i. delivery of information resulting from inventory, general survey, and research,

and exploration and exploitation to the Minister and the governor;

j delivering information concerning the result of production, domestic and

export sales to the Minister and the governor;

k. assistance and supervision on post mining land reclamation; and

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l. improvement of the capability of the apparatus of the regency (kabupaten)

/municipality government in administering of mining business management.

(2) The authority of the kabupaten (regency) /municipality government as referred to

in clause (1) shall be exercised pursuant to the provisions of laws and legislations.

CHAPTER V

MINING AREA

Section One General

Article 9

(1) The Mining Area (Wilayah Pertambangan /WP) as a part of national space planning

shall become a base for stipulation of mining activities.

(2) The Mining Area (Wilayah Pertambangan /WP) as referred to in clause (1) shall be

stipulated by the Government after a coordination with the regional government

and a consult with the House of Representatives of the Republic of Indonesia;

Article 10

Stipulation of Mining Area (Wilayah Pertambangan /WP) as referred to in clause Article

(2) shall be executed:

a. in a transparent, participative, and responsible manner;

b. in an integrated manner by considering opinions from related government

institutions, the people, and by considering the aspects of ecology, economy, and

social culture, and has environment insight; and

c. by considering aspiration of the region.

Article 11

The government and the regional government shall conduct survey and research of

mining in the context of preparation of Mining Area (Wilayah Pertambangan /WP).

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Article 12

Further provisions concerning limit, size, and mechanism of stipulation of WP as

referred to in Article 9, Article 10, and Article 11 shall be regulated under a

government regulation.

Article 13

Mining Area (Wilayah Pertambangan /WP) comprises of:

a. (Wilayah Usaha Pertambangan Khusus /WUPK);

b. People's Mining Area (Wilayah Pertambangan Rakyat /WPR); and

c. State Reserve Area (Wilayah Pencadangan Negara /WPN).

Section Two

Mining Business Area

Article 14

(1) Stipulation of a (Wilayah Usaha Pertambangan Khusus /WUPK) shall be made by the

Government after a consult with the regional government and submitted in writing

to the House of Representatives of the Republic of Indonesia.

(2) The coordination as referred to in clause (1) shall be conducted by the respective

regional government conforming to data and information the Government and the

local government have in hand.

Article 15

The Government may delegate part of its authority in stipulation of a Mining Area

(Wilayah Pertambangan /WP) as referred to in Article 14 clause (1) to the provincial

government in accordance with the provisions of laws and legislations.

Article 16

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One (Wilayah Usaha Pertambangan Khusus /WUPK) shall consist of 1 (one) ore more

Special Mining Business Permit Areas (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK) which location is crossing territory of the province, crossing territory

of the kabupaten (regency) /municipality, and /or within 1 (one) kabupaten (regency)

/municipality area.

Article 17

Size and limit of Special Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK) for metal and coal materials shall be stipulated by the Government

under coordination with the regional government based on criteria the Government

possesses.

Article 18

The criteria to stipulate 1 (one) or more Special Mining Business Permit Areas (Wilayah

Izin Usaha Pertambangan Khusus/WIUPK) in 1 (one) Mining Business Area (Wilayah

Usaha Pertambangan /WUP) shall be as follows:

a. geographical location;

b. conservation rules;

c. environment protection bearing capacity;

d. optimization of mineral and /or coal resource; and

e. population density level.

Article 19

Further provisions concerning procedure of stipulation of boundary and size of a

Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) as referred to in

Article 17 shall be regulated under a government regulation.

Section Three

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People's Mining Area (Wilayah

Pertambangan Rakyat /WPR)

Article 20

People's mining activities shall be executed in a People's Mining Area (Wilayah

Pertambangan Rakyat /WPR).

Article 21

The People's Mining Area (Wilayah Pertambangan Rakyat /WPR) as referred to in Article

20 shall be stipulated by the bupati (regent) /mayor after a consult with the Legislative

Council of the kabupaten (regency) /municipality (Dewan Perwakilan Rakyat Daerah

Kabupaten /Kota).

Article 22

The criteria for stipulation of a People's Mining Area (Wilayah Pertambangan Rakyat

/WPR) shall be as follows:

a. it has a secondary mineral reserve located in a river and /between river banks;

b. it has metal or coal primary reserve at the depth of a maximum of 25 (twenty-five)

meters;

c. sedimentation of terrace, flood plain, and sedimentation of ancient river;

d. maximum People's Mining Area (Wilayah Pertambangan Rakyat /WPR) size shall be

25 (twenty-five) hectares;

e. stating type of commodity to mine; and /or

f. it is an area or location of people's mine activity which has been exploited for at

least 15 (fifteen) years.

Article 23

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In stipulation of a People's Mining Area (Wilayah Pertambangan Rakyat /WPR) as

referred to in Article 21, the bupati (regent) /mayor shall make an announcement

concerning the People's Mining Area (Wilayah Pertambangan Rakyat /WPR) plan to the

public openly.

Article 24

The location or area of People's Mining Area (Wilayah Pertambangan Rakyat /WPR)

which has been exploited but not yet stipulated as a People's Mining Area (Wilayah

Pertambangan Rakyat /WPR) shall be given priority to be stipulated as a People's Mining

Area (Wilayah Pertambangan Rakyat /WPR).

Article 25

Further provisions concerning guidance, procedure, and stipulation of a People's

Mining Area (Wilayah Pertambangan Rakyat /WPR) as referred to in Article 21 and

Article 23 shall be regulated under a government regulation.

Further provisions concerning criteria and mechanism of stipulation of a People's

Mining Area (Wilayah Pertambangan Rakyat /WPR) as referred to in Article 22 and

Article 23 shall be regulated under a regulation of the kabupaten (regency)

/municipality.

Section Four

State Reserve Area

Article 27

(1) For national strategic interest, the Government, with approval of the House of

Representatives of the Republic of Indonesia and by considering local aspiration

and stipulating the State Reserve Area (Wilayah Pencadangan Negara /WPN) as an

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area reserved for specific commodity and conservation area in the context of

maintaining ecosystem and environment balance.

(2) Part area size of a State Reserve Area (Wilayah Pencadangan Negara /WPN) stipulated

for a specific commodity as referred to in clause (1) may be exploited after an

approval from the House of the Representatives of the Republic of Indonesia.

(3) A time limit for the State Reserve Area (Wilayah Pencadangan Negara /WPN)

stipulated for conservation as referred to in clause (1) is stipulated with an

approval from the House of the Representatives of the Republic of Indonesia.

(4) The area which will be exploited as referred to in clause (2) and clause (3) will

change status into a Special Mining Business Area (Wilayah Usaha Pertambangan

Khusus /WUPK).

Article 28

The change of status of a State Reserve Area (Wilayah Pencadangan Negara /WPN) as

referred to in Article 27 clause (2), clause (3), and clause (4) into a Special Mining

Business Area (Wilayah Usaha Pertambangan Khusus /WUPK) may be made by

considering:

a. supply of domestic industry and energy raw materials;

b. source of national foreign exchange;

c. regional condition based on limitation of infrastructure and facilities;

d. has a potential to develop as an economy growth center;

e. environment bearing capacity; and /or

f. utilization of high technology and big capital investment.

Article 29

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(1) The Special Mining Business Area (Wilayah Usaha Pertambangan Khusus /WUPK) as

referred to in Article 24 clause (4) to exploit shall be stipulated by the Government

after a coordination with the regional government.

(2) Execution of mining business activities in the Special Mining Business Area

(Wilayah Usaha Pertambangan Khusus /WUPK) as referred to in clause (1) shall be

conducted in form of a Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK).

Article 30

One Special Mining Business Area (Wilayah Usaha Pertambangan Khusus /WUPK) shall

consist of 1 (one) ore more Special Mining Business Permit Areas (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) which location is crossing territory of the province,

crossing territory of the kabupaten (regency) /municipality, and /or within 1 (one)

kabupaten (regency) /municipality area.

Article 31

Size and limit of the Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) for metal and coal materials shall be stipulated by the

Government under coordination with the regional government based on criteria and

information the Government possesses.

Article 32

The criteria to stipulate 1 (one) or more Special Mining Business Permit Areas (Wilayah

Izin Usaha Pertambangan Khusus/WIUPK) in 1 (one) Special Mining Business Area

(Wilayah Usaha Pertambangan Khusus /WUPK) shall be as follows:

a. geographical location;

b. conservation rules;

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c. environment protection bearing capacity;

d. optimization of mineral and /or coal resource; and

e. population density level.

Article 33

Further provisions concerning procedure of stipulation of size and bondary of a Special

Mining Business Permit Area (Wilayah Izin Usaha Pertambangan Khusus/WIUPK) as

referred to in Article 31 and Article 32 shall be regulated under a government

regulation.

CHAPTER VI

MINING BUSINESS

Article 34

(1) Mining business is categorized into:

a. mineral mining; and

b. coal mining

(2) The mineral mining as referred to in clause (1) item a is categorized into:

a. radioactive mineral mining;

b. metal mineral mining;

c. non-metal mineral mining; and

d. rock mining.

(3) Further provisions concerning stipulation of a mine commodity into a mineral

mining group as referred to in clause (2) shall be regulated under a government

regulation.

Article 35

The mining business as referred to in Article 34 shall be executed in form of:

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a. Mining Business Permit (Izin Usaha Pertambangan/IUP);

b. People's Mining Business Permit (Izin Pertambangan Rakyat/IPR); dan

c. Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK).

CHAPTER VII

MINING BUSINESS PERMIT (IZIN USAHA PERTAMBANGAN/IUP)

Section One

General

Article 36

(1) Mining Business Permit (Izin Usaha Pertambangan/IUP) comprises of two phases:

a. Exploration Mining Business Permit (IUP Eksplorasi) covering the activity of

general survey, exploration, and feasibility study;

b. Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP)

covering the activities of construction, mining, processing, and refining, and

transportation and sales.

(2) The holder of the Exploration Mining Business Permit (IUP Eksplorasi) and

Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP) may

run some of or all activities as referred to in clause (1).

Article 37

The Mining Business Permit (Izin Usaha Pertambangan/IUP) is granted by:

a. the bupati /mayor if the Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) is located within a territory of a kabupaten (regency)

/municipality;

b. the governor, if the Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

/WIUP) is located crossing the territories of the kabupaten /municipality in 1 (one)

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province after a recommendation from the respective bupati (regent) /mayor

conforming to the provisions of laws and legislations; and

c. b. the Minister, if the Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) is located crossing the territories of the province after a

recommendation from the respective governor and bupati (regent) /mayor

conforming to the provisions of laws and legislations.

Article 38

The Mining Business Permit (Izin Usaha Pertambangan/IUP) can be awarded to:

a. a business entity;

b. a cooperative; and

c. an individual.

Article 39

(1) The Exploration Mining Business Permit (IUP Eksplorasi) as referred to in Article 36

clause (1) item a shall include at least:

a. name of the company;

b. location and size of area;

c. general spatial planning;

d. surety bond;

e. investment capital;

f. time extension of an activity phase;

g. rights and obligations of the holder of the Mining Business Permit (Izin Usaha

Pertambangan/IUP);

h. duration of validity of activity phase;

j. type of business awarded;

23

j. plan for development and empowerment of the community in the vicinity of

the mining area;

k. taxation;

l. settlement of dispute;

m. fixed fee and exploration fee; and

n. AMDAL (Environment Impact Statement).

(2) The Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP) as

referred to in Article 36 clause (1) item a shall include at least:


b. size of area;

c. location of mining;

d. location of processing and refining;

e. transportation and sales;

f. investment capital;

g. duration of validity of the Mining Business Permit (Izin Usaha

Pertambangan/IUP);

h. duration of activity phase;

i. settlement of land issues;

j. the environment including post mining reclamation;

k. reclamation and post mining bond fund;

l. Extension of the Mining Business Permit (Izin Usaha Pertambangan/IUP);

m. rights and obligations of the holder of the Mining Business Permit (Izin Usaha

Pertambangan/IUP);

24

n. plan for development and empowerment of the community in the vicinity of

the mining area;

o. taxation;

p. non tax state income comprises of fixed fee and production fee;

q. settlement of dispute;

r. work safety and health;

s. conservation of mineral or coal;

t. utilization of domestic goods and services;

u. application of good economy and mining engineering rules;

v. improvement of Indonesian workers;

w. management of mineral or coal data; and

x. mastery, development, and implementation of mineral or coal mining

technology;

Article 40

(1) The Mining Business Permit (Izin Usaha Pertambangan/IUP) as referred to in

Article 36 clause (1) shall be granted for 1 (one) type of mineral or coal.

(2) The holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) as referred

to in clause (1) who discovers other minerals in the managed Mining Business

Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) shall be given priority for

exploitation thereof.

(3) The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) who

intends to exploit other minerals as referred to in clause (2) shall submit a new

Mining Business Permit (Izin Usaha Pertambangan/IUP) proposal to the Minister,

the governor, the bupati (regent) /mayor in accordance with their authority.

25

(4) The holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) as referred

to in clause (2) may state his /her unwillingness to exploit the other minerals

discovered.

(5) The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) who is

not willing to exploit the other minerals discovered as referred to in clause (4),

shall safeguard the other mineral to prevent utilization by other party.

(6) The Mining Business Permit (Izin Usaha Pertambangan/IUP) for the other mineral

as referred to in clause (4) and (5) may be granted to another party by the

Minister, the governor, and the bupati (regent) /mayor in accordance with their

authority.

The Mining Business Permit (Izin Usaha Pertambangan/IUP) shall not be used for

purpose other than intended in the grant of the Mining Business Permit (Izin Usaha

Pertambangan/IUP).

Section Two

Exploration Mining Business Permit (IUP Eksplorasi)

Article 42

(1) The Exploration Mining Business Permit (IUP Eksplorasi) for metal mineral mining

may be granted for a period of a maximum of 8 (eight) years.

(2) The Exploration Mining Business Permit (IUP Eksplorasi) for non metal mineral

mining may be granted for a maximum period of 3 (three0 Years and specific non

metal mineral may be granted for a maximum period of 7 (seven) years.

(3) The Exploration Mining Business Permit (IUP Eksplorasi) for rock mineral mining

may be granted for a period of a maximum of 3 (three) years.

26

(4) The Exploration Mining Business Permit (IUP Eksplorasi) for coal mineral mining

may be granted for a period of a maximum of 7 (seven) years.

Article 43

(1) In case of the activity of exploration and the activity of feasibility study, the holder

of the Exploration Mining Business Permit (IUP Eksplorasi) who obtains excavated

mineral or coal shall submit a report to the grantor of the Mining Business Permit

(Izin Usaha Pertambangan/IUP).

(2) The holder of the Exploration Mining Business Permit (IUP Eksplorasi) intending to

sell the mineral or coal as referred to in clause (1) shall propose for a temporary

permit to conduct transportation and sales.

Article 44

The temporary permit as referred to in Article 43 clause (2) shall be granted by the

Minister, the governor, and the bupati (regent) /mayor in accordance with their

authority.

Article 45

To the excavated mineral or coal as referred to in Article 43, a production fee may be

imposed.

Section Three

Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP)

Article 46

(1) Every holder of a Exploration Mining Business Permit (IUP Eksplorasi) is

guaranteed to obtain a Production Operation Mining Business Permit (IUP Operasi

Produksi /IUPOP) as a continuance of his /her mining business activity.

27

(2) The Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP)

may be granted to a business entity, cooperative, or an individual upon the result of

bid of a Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) for

metal or coal mineral which have obtained data of the result of feasibility study.

Article 47


for metal mineral mining may be granted for a maximum period of 20 (twenty)

years and may be extended twice, respectively for 10 (ten) years.


for non metal mineral mining may be granted for a maximum period of 10 (ten)

years and may be extended twice, respectively for 5 (five) years.


for non specific type of metal mineral mining may be granted for a maximum

period of 20 (twenty) years and may be extended twice, respectively for 10 (ten)

years. ,


for rock mining may be granted for a maximum period of 5 (five) years and may be

extended twice, respectively for 5 (five) years.


for coal mining may be granted for a maximum period of 20 (twenty) years and

may be extended twice, respectively for 10 (ten) years.

Article 48

The Production Operation Mining Business Permit (IUP Operasi Produksi /IUPOP) is

granted by:

28

a. the bupati (regent)/mayor if the location of mining, the location of processing and

refining, and seaport is within a territory of a kabupaten (regency) /municipality;

b. the governor, if the if the location of mining, the location of processing and refining,

and seaport is crossing territories of separate kabupaten (regencies)/municipalities

after a recommendation from the respective bupati (regent) /mayor conforming to

the provisions of laws and legislations; and

c. the MInister, if the if the location of mining, the location of processing and refining,

and seaport is in the territory of another province after a recommendation from the

respective bupati (regent) /mayor conforming to the provisions of laws and

legislations.

Article 49

Further provisions concerning procedure of grant of Exploration Mining Business

Permit (IUP Eksplorasi) as referred to in Article 42 and Production Operation Mining

Business Permit (IUP Operasi Produksi /IUPOP) as referred to in Article 46 shall be

regulated under a government regulation.

Section Four

Mineral Mining

Paragraph 1

Radioactive Mineral Mining

Article 50

The Mining Business Area (Wilayah Usaha Pertambangan /WUP) for radioactive minerals

shall be stipulated by the Government and its exploitation shall be executed in

accordance with the provisions of laws and legislations.

Paragraph 2

29

Metal Mineral Mining

Article 51

The Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) for metal

mineral shall be granted to a business entity, cooperative, and individual through a

bid.

Article 52

(1) The holder of Exploration Mining Business Permit (IUP Eksplorasi) for metal

mineral shall be granted a Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) with minimum size of 5,000 (five thousand hectares) and a

maximum of 100,000 (one hundred thousand) hectares.

(2) On an area where a Exploration Mining Business Permit (IUP Eksplorasi) for metal

mineral has been granted, a Mining Business Permit (Izin Usaha Pertambangan/IUP)

may be given to another party to exploit another mineral which discovery is

separate.

(3) The grant of Mining Business Permit (Izin Usaha Pertambangan/IUP) as referred to in

clause (2) shall be made after considering opinions from the first holder of a Mining


Article 53

The holder of Production Operation Mining Business Permit (IUP Operasi Produksi

/IUPOP) for metal mineral shall be granted a Mining Business Permit Area (Wilayah

Izin Usaha Pertambangan /WIUP) for a maximum size of 25,000 (twenty-five thousand)

hectares.

Paragraph 3

Non Metal Mineral Mining

30

Article 54

The Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) for non

metal mineral shall be granted to a business entity, cooperative, and individual

through a proposal for an area to the grantor of permit as referred to in Article 37.

Article 55

(1) The holder of Exploration Mining Business Permit (IUP Eksplorasi) for non metal

mineral shall be granted a Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) with minimum size of 500 (five hundred hectares) and a

maximum of 25,000 (twenty-five thousand) hectares.

(2) On an area where a Exploration Mining Business Permit (IUP Eksplorasi) for non

metal minerals has been granted, a Mining Business Permit (Izin Usaha

Pertambangan/IUP) may be given to another party to exploit another mineral which

discovery is separate.




Article 56


/IUPOP) of non metal mineral shall be granted a Mining Business Permit Area (Wilayah

Izin Usaha Pertambangan /WIUP) for a maximum size of 5,000 (five thousand) hectares.

Paragraph 4

Rock Mining

Article 57

31

The Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) for rock

shall be granted to a business entity, cooperative, and individual through a proposal

for an area to the grantor of permit as referred to in Article 37.

Article 58

(1) The holder of Exploration Mining Business Permit (IUP Eksplorasi) for rock shall be

granted a Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP)

with minimum size of 5 (five hectares) and a maximum of 5,000 (five thousand)

hectares.

(2) On an area where a Exploration Mining Business Permit (IUP Eksplorasi) for rock

has been granted, a Mining Business Permit (Izin Usaha Pertambangan/IUP) may be

given to another party to exploit another mineral which discovery is separate.




Article 59


/IUPOP) for rock shall be granted a Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) for a maximum size of 1,000 (one thousand) hectares.

Section Five

Coal Mining

Article 60

The Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) for coal

shall be granted to a business entity, cooperative, and individual through a bid.

32

Article 61

(1) The holder of Exploration Mining Business Permit (IUP Eksplorasi) for coal shall be

granted a Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP)

with minimum size of 5,000 (five thousand hectares) and a maximum of 50,000

(fifty thousand) hectares.

(2) On an area where a Exploration Mining Business Permit (IUP Eksplorasi) for coal

has been granted, a Mining Business Permit (Izin Usaha Pertambangan/IUP) may be

given to another party to exploit the mineral which discovery is separate.




Article 62


/IUPOP) for coal shall be granted a Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan /WIUP) for a maximum size of 15,000 (fifteen thousand) hectares.

Article 63

Further provisions concerning procedure to obtain the Mining Business Permit Area

(Wilayah Izin Usaha Pertambangan /WIUP) as referred to in Article 51, Article 54, Article

57, and Article 60 shall be regulated under a government regulation.

CHAPTER VIII

REQUIREMENTS FOR MINING BUSINESS PERMIT

Article 64

The government and the local government, in accordance with their authority shall

announce the plan of the mining business activities in the Mining Business Permit Area

33

(Wilayah Izin Usaha Pertambangan /WIUP) as referred to in Article 16 and grant the

Exploration Mining Business Permit (IUP Eksplorasi) and Production Operation Mining

Business Permit (IUP Operasi Produksi /IUPOP) as referred to in Article 36 to the public

openly.

Article 65

(1) The business entity, cooperative, and individual, as referred to in Article 51, Article

54, Article 57, and Article 60 mining a mining business shall be obliged to meet

administrative, technical, environment, and financial requirements.

(2) Further terms pertaining to the administrative, technical, environment, and

financial requirements as referred to in clause (1) shall be regulated under a


CHAPTER IX

PEOPLE'S MINING PERMIT

Article 66

The people's mining activity as referred to in Article 20 shall be categorized as follows:

a. metal mineral mining;

b. non metal mineral mining;

c. rock mining; and /or

d. coal mining.

Article 67

(1) The bupati (regent) /mayor grants the People's Mining Business Permit (Izin

Pertambangan Rakyat/IPR) in particular for the local people, be them individuals or

community group and /or cooperative.

34

(2) The bupati (regent) /mayor may delegate the authority of execution of grant of

People's Mining Business Permit (Izin Pertambangan Rakyat/IPR)as referred to in

clause (1) to the chief of subdistrict (camat) pursuant to the provisions of laws and

legislations.

(3) To obtain the People's Mining Business Permit (Izin Pertambangan Rakyat/IPR) as

referred to in clause (1), the applicant shall submit a proposal to the bupati

(regent) /mayor.

Article 68

(1) The size of area for 1 (one) People's Mining Business Permit (Izin Pertambangan

Rakyat/IPR) which may be granted to:

a. an individual is a maximum of 1 (one) hectare;

b. a community group is a maximum of 5 (five) hectares; and /or

c. a cooperative is a maximum of 10 (one) hectare;

(2) The People's Mining Business Permit (Izin Pertambangan Rakyat/IPR) shall be given

for a maximum period of 5 (five) years which may be extended.

Article 69

The holder of a People's Mining Business Permit (Izin Pertambangan Rakyat/IPR) shall

be entitled to:

a. get an assistance and supervision in work safety and health, the environment

mining engineering, and management from the government and /or regional

government; and

b. receive capital aid in accordance with the provisions of laws and legislations.

Article 70

The holder of a People's Mining Business Permit (Izin Pertambangan Rakyat/IPR) shall:

35

a. execute mining activities no later than 3 (three) months after the People's Mining

Business Permit (Izin Pertambangan Rakyat/IPR) is issued;

b. comply with the provisions of laws and legislations in work safety and health in

mining, environment management, and meet applicable standards;

c. manage the environment with the local government;

d. pay a fixed fee and exploration fee; and

e. submit a report of execution of people's mining business activities regularly to the

grantor of the People's Mining Business Permit (Izin Pertambangan Rakyat/IPR).

Article 71

(1) As addition to matters as referred to in Article 70, the holder of a People's Mining

Business Permit (Izin Pertambangan Rakyat/IPR) in running the activities of people's

mining as referred to in Article 66 shall comply with mining technical requirements.

(2) Further provisions concerning mining technical requirements as referred to in

clause (1) shall be regulated under a government regulation.

Article 72

Further provisions concerning procedure of grant of a People's Mining Business Permit

(Izin Pertambangan Rakyat/IPR) shall be regulated under a kabupaten

(regency)/municipality local regulation.

Article 73

(1) The government of the kabupaten (regency)/municipality runs assistance in

exploitation, mining technology, and investment and marketing in the context of

improving the capability of the people's mining business.

(2) The government of the kabupaten (regency)/municipality shall be responsible for

technical safeguarding on people's mining business covering:

36

a. work safety and health;

b. management of the environment;

c. post mining.

(3) To execute technical safeguarding as referred to in clause (2), the government of the

kabupaten (regency)/municipality shall appoint a mine inspector functional officer

in accordance with the provisions of laws and legislations.

(4) The government of the kabupaten (regency)/municipality shall take a record of

production of all people's mining business activities in its region and shall report

thereof regularly to the Minister and respective governor.

CHAPTER X

SPECIAL MINING BUSINESS PERMIT (IZIN

USAHA PERTAMBANGAN KHUSUS /IUPK)

Article 74

(1) A Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall be

granted by the Minister by considering regional interest.

(2) The Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) as

referred to in clause (1) shall be granted for 1 (one) type of mineral or coal in 1 (one)

Special Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK).

(3) The holder of a Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) as referred to in clause (1) who discovers other minerals in the

managed Special Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK) shall be given priority for exploitation thereof.

37

(4) The holder of the Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) who intends to exploit other minerals as referred to in clause (2) shall

submit a new Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) proposal to the Minister.

(5) The holder of a Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) as referred to in clause (2) may state his /her unwillingness to exploit

the other minerals discovered.

(6) The holder of the Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) who is not willing to exploit the other minerals discovered as referred

to in clause (4), shall safeguard the other mineral to prevent utilization by other

party.

(7) The Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) for the

other mineral as referred to in clause (4) and (5) may be granted to another party by

the Minister.

Article 75

(1) The grant of Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK)

as referred to in Article 74 clause (1) shall be made based on considerations as

referred to in Article 28.

(2) The Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) as

referred to in clause (1) may be granted to a business entity which has Indonesian

legal entity, be it in form of a state owned legal entity, a regional owned legal entity,

or a private business entity.

38

(3) The state owned business entity and regional owned business entity as referred to

in paragraph (2) shall be given priority in obtaining the Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK).

(4) For the private business entity as referred to in clause (2), obtaining a Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall be conducted

through bid of a Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK).

Article 76

(1) The Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK)

comprises of two phases:

a. Exploration Special Mining Business Permit (IUPK Eksplorasi)covering the

activity of general survey, exploration, and feasibility study;

b. Production Operation Special Mining Business Permit (IUPK Operasi Produksi)

covering the activities of construction, mining, processing, and refining, and

transportation and sales.

(2) The holder of the Exploration Special Mining Business Permit (IUPK Eksplorasi) and

Production Operation Special Mining Business Permit (IUPK Operasi Produksi) may

run some of or all activities as referred to in clause (1).

(3) Further provisions concerning procedure to obtain a Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK) as referred to in clause (1) shall be

regulated under a government regulation.

Article 77

39

(1) Every holder of a Exploration Special Mining Business Permit (IUPK Eksplorasi) is

guaranteed to obtain a Production Operation Special Mining Business Permit

(IUPK Operasi Produksi) as a continuance of his /her mining business activity.

(2) The Production Operation Special Mining Business Permit (IUPK Operasi Produksi)

may be granted to a business entity which is an Indonesian legal entity as referred

to in Article 75 clause (3) and clause (4) which has obtained the data of result of

feasibility study.

Article 78

The Exploration Special Mining Business Permit (IUPK Eksplorasi) as referred to in

Article 76 clause (1) item a shall include at least:


b. size and location of area;

c. general spatial planning;

d. surety bond;

e. investment capital;

f. time extension of an activity phase;

g. rights and obligations of the holder of the Special Mining Business Permit (Izin

Usaha Pertambangan Khusus/IUPK);

h. duration of activity phase;

j. type of business awarded;

j. plan for development and empowerment of the community in the vicinity of the

mining area;

k. taxation;

l. settlement of dispute and land issues;

40

m. fixed fee and exploration fee; and

n. AMDAL (Environment Impact Statement).

Article 79

The Production Operation Special Mining Business Permit (IUPK Operasi Produksi) as

referred to in Article 76 clause (1) item b shall include at least:


b. size of area;

c. location of mining;

d. location of processing and refining;

e. transportation and sales;

f. investment capital;

g. duration of activity phase;

h. settlement of land issues;

i. the environment including post mining reclamation;

j. reclamation and post mining bond fund;

k. duration of validity of the Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK);

l. extension of the Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK);

m. rights and obligations;

n. development and empowerment of the community in the vicinity of the mining

area;

o. taxation;

41

p. fixed fee and production fee and state /regional income portion, comprises of profit

sharing of net profit since production;

q. settlement of dispute;

r. work safety and health;

s. conservation of mineral or coal;

f. utilization of domestic goods, services, technology, engineering and construction

capability;

u. application of good economy and mining engineering rules;

v. improvement of Indonesian workers;

w. management of mineral or coal data;

x. mastery, development, and implementation of mineral or coal mining technology;

and

y. divestment of shares

Article 80

The Mining Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK)

shall not be used for purpose other than intended in the grant of the Special Mining

Business Permit (Izin Usaha Pertambangan Khusus/IUPK).

Article 81

(1) In case of the activity of exploration and the activity of feasibility study, the holder

of the Exploration Special Mining Business Permit (IUPK Eksplorasi) who obtains

excavated mineral or coal shall submit a report to the Minister.

(2) The holder of the Exploration Special Mining Business Permit (IUPK Eksplorasi)

intending to sell the metal mineral or coal as referred to in paragraph (1) shall

propose for a temporary permit to conduct transportation and sales.

42

(3) The temporary permit as referred to in clause (2) shall be granted by the Minister.

Article 82

To the excavated mineral or coal as referred to in Article 81, a production fee may be

imposed.

The requirement for size of are and time limit conforming to mining business category

applicable for a holder of Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) covers:

a. the size of 1 (one) Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) for the phase of activity ofmetal mineral mining

exploration shall be given at a maximum size of 100,000 (one hundred thousand)

hectares.

b. the size of 1 (one) Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) for the phase of production operation of metal

mineral mining shall be given at a maximum size of 25,000 (twenty-five thousand)

hectares.

c. the size of 1 (one) Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) for the phase of exploration activity shall be given at

a maximum size of 50,000 (fifty thousand) hectares.

d. the size of 1 (one) Special Mining Business Permit Area (Wilayah Izin Usaha

Pertambangan Khusus/WIUPK) for the phase of production operation activity shall be

given at a maximum size of 15,000 (fifteen thousand) hectares.

e. The Exploration Special Mining Business Permit (IUPK Eksplorasi) for metal mineral

mining may be granted for a period of a maximum of 8 (eight) years.

43

f. The Exploration Special Mining Business Permit (IUPK Eksplorasi) for coal mining

may be granted for a period of a maximum of 7 (seven) years.

g. The Production Operation Special Mining Business Permit (IUPK Operasi Produksi)

for metal mineral or coal mining may be granted for a maximum period of 20

(twenty) years and may be extended twice, respectively for 10 (ten) years.

Article 84

Further provisions concerning procedure to obtain the Special Mining Business Permit

Area (Wilayah Izin Usaha Pertambangan Khusus/WIUPK) as referred to in Article 74

clause (2) and clause (3), and Article 75 clause (3) shall be regulated under a


CHAPTER XI

REQUIREMENTS FOR SPECIAL MINING BUSINESS PERMIT

Article 85

The government shall announce the plan of the mining business activities in the Special

Mining Business Permit Area (Wilayah Izin Usaha Pertambangan Khusus/WIUPK) as

referred to in Article 30 and grant the Exploration Special Mining Business Permit

(IUPK Eksplorasi) and Production Operation Special Mining Business Permit (IUPK

Operasi Produksi) as referred to in Article 76 to the public openly.

(1) The business entity as referred to in Article 75 clause (2) which running the activity

in the Special Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK) shall satisfy administrative, technical, environment, and financial

requirements.

44

(2) Further terms pertaining to the administrative, technical, environment, and

financial requirements as referred to in paragraph (1) shall be regulated under a


CHAPTER XII

MINING DATA

Article 87

To support preparation of the Mining Area (Wilayah Pertambangan /WP) and

development of mining knowledge and technology, the Minister or the governor,

conforming to their authority may assign a state and /or regional research institution

to conduct survey and research in mining.

Article 88

(1) The data acquired from the mining business activity shall be the data owned by the

Government and /or regional government conforming to their authority.

(2) The data of mining business owned by the regional government shall be delivered

to the Government for national level mining data processing.

(3) The data processing as referred to in clause (1) shall be administered by the

Government and /or regional government conforming to their authority.

Article 89

Further provisions concerning procedure of assigning survey and research as referred

to in Article 87 and data processing as referred to in Article 88 shall be regulated under

a government regulation.

CHAPTER XIII

RIGHTS AND OBLIGATIONS

Section One Rights

Article 90

45

The holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) may conduct some of

or all phases of mining business for both exploration and production operation

activities.

Article 91

The holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) may utilize public

facilities for mining purpose after satisfying the provisios of laws and legislations.

Article 92


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) has the right to own

mineral, including its trace minerals or coal already produced after the exploration or

production fee is paid, except for radioactive trace mineral.

Article 93

(1) The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall not transfer

his /her Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special Mining

Business Permit (Izin Usaha Pertambangan Khusus/IUPK) to another party.

(2) Transfer of ownership and /or share at the Indonesian Stock Exchange may only be

conducted after running a specific phase of exploration activity.

(3) The transfer of ownership and /or share as referred to in clause (2) may only be

conducted under the following conditions:

a. must deliver a notification to the Minister, governor, or bupati (regent) /mayor

conforming to their authority; and

46

b. provided that it is not contradictive to the provisions of laws and legislations.

Article 94

The right of the holder of Mining Business Permit (Izin Usaha Pertambangan/IUP) or

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall be

guaranteed foro running mining business in accordance with the provisions of laws

and legislations.

Section Two

Obligations

Article 95

The holder of Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall:

a. implement good mining engineering rules;

b. manage finance conforming to Indonesian accounting system;

c. create an added value of mineral and /or coal resource;

d. conduct development and empowerment of the local community; and

e. comply with the tolerance limit of environment bearing capacity.

Article 96

In the implementation of good mining engineering rules, the holder of the Mining

Business Permit (Izin Usaha Pertambangan/IUP) and the Special Mining Business Permit

(Izin Usaha Pertambangan Khusus/IUPK) shall execute:

a. the provisions concerning mining work safety and health;

b. mining operation safety;

c. management and supervision of mining environment, including reclamation and

post mining activities;

47

d. the effort of conservation of mineral and coal resources;

e. management of mining tailing of a mining business activity in solid, liquid, or gas

form until it meets the environment quality standard before release to the

environment.

Article 97

The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall guarantee the

application of environment quality standard in accordance with characteristics of a

region.

Article 98


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall maintain the

preservation of function and support capability of the respective water resource in

accordance with the provisions of laws and legislations.

Article 99

(1) Every holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) and

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall seliver

a reclamation and post mining plan when proposing for a Production Operation

Mining Business Permit (IUP Operasi Produksi /IUPOP) or Production Operation

Special Mining Business Permit (IUPK Operasi Produksi).

(2) Execution of the reclamation and post mining activity shall be made conforming to

post mining land purpose.

(3) The post mining land purpose as referred to in clause (2) shall be written in a land

use agreement between the holder of Mining Business Permit (Izin Usaha

48

Pertambangan/IUP) or Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) and holder of right over the land.

Article 100

(1) The holder of Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall provide a

guarantee fund for reclamation and post mining guarantee fund.

(2) The Minister, governor, or bupati (regent) /mayor, conforming to their authority

may assign a third party to conduct reclamation and post mining activities utilizing

the guarantee fund as referred to in clause (1).

(3) The provisions as referred to in clause (2) shall apply if the holder of the Mining

Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business Permit

(Izin Usaha Pertambangan Khusus/IUPK) fail to execute the reclamation and post

mining activities conforming to approved plan.

Article 101

Further terms concerning reclamation and post mining as referred to in Article 99 and

reclamation guarantee fund and post mining guarantee fund as referred to in Article

100 shall be regulated under a government regulation.

Article 102

The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall increase the

added value of the mineral and /or coal in execution of the mining, processing, and

refining, and utilization of mineral and coal.

Article 103

49

(1) The holder of Production Operation Mining Business Permit (IUP Operasi Produksi

/IUPOP) and Production Operation Special Mining Business Permit (IUPK Operasi

Produksi) shall execute processing and refining of mining result in Indonesia.

(2) The holder of Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) as referred to in

clause (1) may process and refine the mining result from another holder of Mining

Business Permit (Izin Usaha Pertambangan/IUP) and Special Mining Business Permit

(Izin Usaha Pertambangan Khusus/IUPK).

(3) Further provisions concerning improvement of added value as referred to in Article

102 and processing and refining as referred to in clause (2) shall be regulated under

a government regulation.

Article 104

(1) For processing and refining, the holder of the Production Operation Mining

Business Permit (IUP Operasi Produksi /IUPOP) and Production Operation Special

Mining Business Permit (IUPK Operasi Produksi) as referred to in Article 103 may

arrange a collaboration with a business entity, cooperative, or individual who has

obtained a Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining


(2) The Mining Business Permit (Izin Usaha Pertambangan/IUP) obtained by a business

entity as referred to in clause (1) shall be a Specific Production Operation Mining

Business Permit (IUP Operasi Produksi /IUPOP) issued by the Minister, the governor,

and the bupati (regent) /mayor in accordance with their authority.


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) as referred to in

50

clause (1) is prohibited from conducting processing and refining of mining result

from anyone who is not a holder of Mining Business Permit (Izin Usaha

Pertambangan/IUP), People's Mining Business Permit (Izin Pertambangan Rakyat/IPR),

or Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK).

Article 105

(1) A business entity which business activity is not in the mining business intending to

sell excavated mineral and /or coal shall first obtain a Production Operation Mining

Business Permit (IUP Operasi Produksi /IUPOP) for sales.

(2) The Mining Business Permit (Izin Usaha Pertambangan/IUP) as referred to in Article

1 paragraph (1) may only be granted once by the by the Minister, the governor, and

the bupati (regent) /mayor in accordance with their authority.

(3) On the excavated mineral or coal to sell as referred to in clause (1), a production fee

may be imposed.

(4) The Business Entity as referred to in clause (1) and clause (2) shall submit a report

of sales of excavated mineral and /or coal to the by the Minister, the governor, and

the bupati (regent) /mayor in accordance with their authority.

Article 106


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) must give priority to

employment of local worker, domestik goods and services in accordance with the

provisions of laws and legislations.

Article 107

In running the production operation activity, the business holder holding a Mining


51

(Izin Usaha Pertambangan Khusus/IUPK) shall involve local entrepreneurs in the region


(1) The holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) an Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall devise a

community development and empowerment program.

(2) The devise of program and plan as referred to in clause (1) shall be with consult

with the Government, the regional government, and the people.

Article 109

Further provisions concerning procedure of execution of community development and

empowerment as referred to in Article 108 shall be regulated under a government

regulation.

Article 110


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall surrender all data

acquired from exploration and production exploitation result to the Minister, the

governor, and the bupati (regent) /mayor in accordance with their authority.

Article 111


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall submit a

written report regularly concerning the work plan and excution of mineral and coal

mining business activities to the Minister, the governor, and the bupati (regent)

/mayor in accordance with their authority.

(2) Further provisions concerning format, type, time, and procedure of submission of

report as referred to in clause (1) shall be regulated under a government regulation.

52

Article 112

(1) After 5 (five) years of production, a business entity holding a Mining Business

Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business Permit (Izin

Usaha Pertambangan Khusus/IUPK) which shares are owned by foreigners shall

conduct a divestment of shares on the Government, regional government, state

owned company, regional owned company, or national private business entity.

(2) Further terms concerning divestment of shares as referred to in paragraph (1) shall

be regulated by a government regulation.

CHAPTER XIV

TEMPORARY SUSPENSION OF MINING BUSINESS PERMIT ACTIVITIES AND

SPECIAL MINING BUSINESS PERMIT

Article 113

(1) Temporary suspension of a mining business activity may be granted to the holder

of Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special Mining

Business Permit (Izin Usaha Pertambangan Khusus/IUPK) in the event of:

a. force majeure

b. obstructive condition which causes halt of part of or all of mining business

activities;

c. when all bearing capacities of the environment of the area cannot support the

load of production operation activity of mineral and /or coal resource

conducted in its area.

(2) The temporary suspension of mining business activity as referred to in clause (1)

shall not reduce the validity period of the Mining Business Permit (Izin Usaha

53

Pertambangan/IUP) and Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK).

(3) The request for temporary suspension of mining business activity as referred to in

clause (1) item a and item b shall be delivered to the Minister, the governor, and the

bupati (regent) /mayor in accordance with their authority.

(4) The temporary suspension as referred to in clause (1) item c may be exercised by the

mine inspector or exercised based on the people's request to the Minister, the

governor, and the bupati (regent) /mayor in accordance with their authority.

(5) The Minister, the governor, and the bupati (regent) /mayor in accordance with their

authority shall issue a written decree on grant or rejection along the reason thereof

upon the request as referred to in clause (3) no later than 30 (thirty) days from the

receipt of the request.

Article 114

(1) The duration of temporary suspension due to force majeure and /or obstructive

condition as referred to in Article 113 clause (1) shall be granted for a maximum of 1

(one) year which may be extended at a maximum once for 1 (one) year.

(2) If within the time before the temporary suspension period expires, the holder of

Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK) is ready to execute his /her

operation activities, the activities shall be reported to the Minister, the governor,

and the bupati (regent) /mayor in accordance with their authority.

(3) The Minister, the governor, and the bupati (regent) /mayor in accordance with their

authority shall revoke the decree of temporary suspension after receiving the report

as referred to in clause (2).

54

Article 115

(1) If temporary suspension of the mining business activity is granted due to force

majeure as referred to in Article 113 clause (1) item a, the obligations of the Mining


(Izin Usaha Pertambangan Khusus/IUPK) to the Government and the local

government cease to apply.

(2) If temporary suspension of the mining business activity is granted due to

conditions obstructive to mining business activities as referred to in Article 113

clause (1) item b, the obligations of the Mining Business Permit (Izin Usaha


Khusus/IUPK) to the Government and the local government continue to apply.

(3) If temporary suspension of the mining business activity is granted due to condition

of environment bearing capacity of the area as referred to in Article 113 clause (1)

item c, the obligations of the Mining Business Permit (Izin Usaha Pertambangan/IUP)

and Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) to the

Government and the local government continue to apply.

Article 116

Further provisions concerning temporary suspension of mining business activity as

referred to in Article 113, Article 114, and Article 115 shall be regulated under a


CHAPTER XV

EXPIRY OF MINING BUSINESS PERMIT AND SPECIAL MINING BUSINESS

PERMIT

Article 117

55

The Mining Business Permit (Izin Usaha Pertambangan/IUP) and Special Mining

Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall expire due to:

a. returned;

b. revoked; or

c. expiry of its validity period.

Article 118


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) may return his /her

Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK) by written statement to the Minister,

the governor, and the bupati (regent) /mayor in accordance with their authority

along a clear reason thereof.

(2) The returning of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) as referred

to in clause (1) shall be stated valid after approval by the Minister, the governor,

and the bupati (regent) /mayor in accordance with their authority and after the

obligations of the holder are complied with.

Article 119

The Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK) can be revoked by the Minister, the

governor, and the bupati (regent) /mayor in accordance with their authority, in the

event that:

a. the holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) fails to comply with

56

the obligations stipulated in the Mining Business Permit (Izin Usaha


Khusus/IUPK) and the provisions of laws and legislations.

b. the holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) conducts a criminal

act as referred to in this Law; or

c. the holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) is stated to be

bankrupt.

Article 120

In the event the period defined in the Mining Business Permit (Izin Usaha


Khusus/IUPK) has expired and an advancement or extension request is not submitted

for the activity or a request is submitted but fails to meet requirements, thet Mining


(Izin Usaha Pertambangan Khusus/IUPK) shall cease to be valid.

Article 121


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) which Mining

Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business Permit

(Izin Usaha Pertambangan Khusus/IUPK) expires due to the reason as referred to in

Article 117, Article 118, Article 119, and Article 129 shall fulfill and settle obligations


57

(2) The obligations of the holder of the Mining Business Permit (Izin Usaha


Khusus/IUPK) as referred to in clause (1) shall be considered to have been complied

with and approved by the Minister, the governor, and the bupati (regent) /mayor

in accordance with their authority.

Article 122

(1) The Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining

Business Permit (Izin Usaha Pertambangan Khusus/IUPK) which has been returned,

revoked, or validity period expires as referred to in Article 121, shall be returned to

the Minister, the governor, and the bupati (regent) /mayor in accordance with their

authority.

(2) The Mining Business Permit Area (Wilayah Izin Usaha Pertambangan /WIUP) or

Special Mining Business Permit Area (Wilayah Izin Usaha Pertambangan

Khusus/WIUPK) which Mining Business Permit (Izin Usaha Pertambangan/IUP) or

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) has expired

as referred to in clause (1) shall be offered to a business entity, cooperative, or

individual through a mechanism in accordance with the provisions of this Law.

Article 123

In the event the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) expires, the holder of

the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining Business

Permit (Izin Usaha Pertambangan Khusus/IUPK) shall surrender all data acquired from

exploration and production operation result to the Minister, the governor, and the

bupati (regent) /mayor in accordance with their authority.

58

CHAPTER XVI

MINING SERVICE BUSINESS

Article 124

(1) The holder of a Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall use local and

/or national mining service companies.

(2) In case the mining service companies as referred to in clause (1) is not available, the

holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special

Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) may use other

mining service companies which establishment are as Indonesian legal entity.

(3) The type of mining service business covers:

a. consulting, planning, execution, and testing of equipment in:

1) general survey;

2) exploration;

3) feasibility study;

4) mining construction;

5) transportation;

6) mining environment;

7) post mining and reclamation; and /or

8) work safety and health;

b. consulting, planning, and testing of equipment in:

1) mining; or

2) processing and refining.

Article 125

59

(1) In the event the holder of Mining Business Permit (Izin Usaha Pertambangan/IUP) or

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) uses mining

service, the responsibility of mining business activity shall remain on the holder of

the Mining Business Permit (Izin Usaha Pertambangan/IUP) or Special Mining


(2) The executive of mining service business can be in form of a business entity,

cooperative, or individual conforming to classification and qualification set forth by

the Minister.

(3) The actor of mining service company shall give priority to local contractors and

workers.


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) is prohibited from

involving affiliates in the mining service business sector in the mining business area

it operates, except under consent of the Minister.

(5) The grant of consent of the Minister as referred to in paragraph (1) shall be made in

the event:

a. there isn't any similar mining service companywithin the area; or

b. there isn't any mining service company which is willing

/capable.

Article 127

Further provisions concerning administering of mining business service as referred to

in Article 124, Article 125, and Article 126 shall be regulated under a regulation of a

minister.

CHAPTER XVII

60

STATE AND REGIONAL INCOME Article 128


Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) shall make

payment for state income and regional income.

(2) The state income as referred to in clause (1) comprises of tax income and non-tax

state income.

(3) The tax income as referred to in clause (2) comprises of:

a. taxes which fall in the authority of the Government pursuant to the provisions

of legislations in taxation; and

b. import duty and excise.

(4) The non tax state income as referred to in clause (2) comprises of:

a. fixed fee;

b. exploration fee;

c. production fee; and

d. compensation for information data.

(5) The regional income as referred to in clause (1) comprises of:

a. regional tax;

b. regional fee; and

c. other legal income pursuant the provisions of laws and legislations.

Article 129

(1) The holder of Production Operation Special Mining Business Permit (IUPK Operasi

Produksi) for metal and coal mineral mining shall pay an amount of 4% (four

percent to the Government and 6% (six percent) to the regional government out of

net profit since production.

61

(2) The portion of the regional government as referred to in clause (1) shall be

regulated as follows:

a. the provincial government gets a portion of 1% (one percent);

b. the kabupaten (regency)/municipality government where production takes

place gets a portion of 2.5% (two point five percent);

c. the other kabupaten (regency)/municipality government in the same province

gets a portion of 2.5% (two point five percent);

Article 130

(1) To the holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK), production

fee is not imposed as referred to in Article 128 clause (4) item c and regional tax and

fee as referred to in Article 128 clause (5) on soil/rock also excavated during

mining.

(2) To the holder of the Mining Business Permit (Izin Usaha Pertambangan/IUP) or the

Special Mining Business Permit (Izin Usaha Pertambangan Khusus/IUPK) production

fee is imposed as referred to in Article 128 clause (4) item c on utilization of

soil/rock also excavated during mining.

Article 131

The amount of tax and non tax state income collected from the holders of Mining

Business Permit (Izin Usaha Pertambangan/IUP) , People's Mining Business Permit (Izin

Pertambangan Rakyat/IPR), or Special Mining Business Permit (Izin Usaha Pertambangan

Khusus/IUPK) shall be stipulated in accordance with the provisions of laws and

legislations

Article 132

62

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