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Print articleMineral and Coal Mining Services Business in Indonesia
January, 2010 -
To support the mining business the Minister of Energy and Mineral Resources issued Regulation No.28 of 2009 regarding Mineral and Coal Mining Services Business (“GR No.28/2009”) on 30 September 2009. This regulation facilitates the implementation of Article 127 of Law No.4 of 2009 regarding Mineral and Coal Mining (“Mineral and Coal Mining Law”). The regulation repeals and replaces, certain previous ministerial decrees.
Under Article 3 of GR No.28/2009, entities that can engage in mining services business are, amongst others, state owned enterprises, regional owned enterprises, private limited liability companies and individuals.
Under Article 4 of GR No.28/2009, mining services businesses are classified into services in mining and the non-core mining. Services in mining shall include consultancy, planning, realization and equipment testing onexploration, due diligence, distribution, industrial safety and post mining activities and reclamation. Services in non-core mining shall include consultancy, planning and equipment testing on the mining activities, processing and smelting. Business services in the mineral and coal mining sector are listed in an attachment to GR No.28/2009.
Holders of a Mining Business License (IUP - Izin Usaha Pertambangan) or a Special Mining Business License (IUPK - Izin Usaha Pertambangan Khusus) may only utilize mining services once their work plan has been approved by the relevant authorities. Mining services are to be provided only by National Mining Services Business Companies and/ or Local Mining Services Business Companies.
If there is no National Mining Services Business Company or Local Mining Services Business Company, the holders of a Mining Business License (IUP) and the Special Mining Business License (IUPK) can use other Mining Services Business Companies.
Subsidiaries and/or affiliates of Mining Business License (IUP) and Special Mining Business License (IUPK) holders may not engage in this business unless they have been acknowledged and approved by the Minister of Energy and Mineral Resources. However, these provisions will be further regulated in a Director General Regulation.
GR No.28/2009 also provides that any engagement of mining services shall be based on proper and reasonable agreement. Furthermore, GR No.28/2009 stipulates that mining services business companies must hold a business license for mining services issued by the relevant authorities. The license is valid for 3 years and is extendable.
Mining services companies must fulfill certain obligations once they have obtained their Business License for Mining Services (IUJP – Izin Usaha Jasa Pertambangan) and Registration Certificate (SKT – Surat Keterangan Terdaftar). These obligations are provided in Article 23 of GR No.28/2009 and include submitting reports to the relevant authorities quarterly and annually. The information that these reports must contain is specified in Article 24 of GR No.28/2009.
The relevant authorities can impose an administrative sanction if the holder of a Mining Business License (IUP) or Special Mining Business License (IUPK) (i) conducts activities not listed in its business license (i.e. its IUJP or SKT), (ii) fails to submit a quarterly report, (iii) does not fulfill its obligations as stipulated in the regulation, (iv) fails to provide the required documents or information or falsifies documents. Possible administrative sanctions include (i) a warning letter, (ii) suspension of part of or all mining services activities; or (iii) cancellation of the business license.
Under Article 3 of GR No.28/2009, entities that can engage in mining services business are, amongst others, state owned enterprises, regional owned enterprises, private limited liability companies and individuals.
Under Article 4 of GR No.28/2009, mining services businesses are classified into services in mining and the non-core mining. Services in mining shall include consultancy, planning, realization and equipment testing onexploration, due diligence, distribution, industrial safety and post mining activities and reclamation. Services in non-core mining shall include consultancy, planning and equipment testing on the mining activities, processing and smelting. Business services in the mineral and coal mining sector are listed in an attachment to GR No.28/2009.
Holders of a Mining Business License (IUP - Izin Usaha Pertambangan) or a Special Mining Business License (IUPK - Izin Usaha Pertambangan Khusus) may only utilize mining services once their work plan has been approved by the relevant authorities. Mining services are to be provided only by National Mining Services Business Companies and/ or Local Mining Services Business Companies.
If there is no National Mining Services Business Company or Local Mining Services Business Company, the holders of a Mining Business License (IUP) and the Special Mining Business License (IUPK) can use other Mining Services Business Companies.
Subsidiaries and/or affiliates of Mining Business License (IUP) and Special Mining Business License (IUPK) holders may not engage in this business unless they have been acknowledged and approved by the Minister of Energy and Mineral Resources. However, these provisions will be further regulated in a Director General Regulation.
GR No.28/2009 also provides that any engagement of mining services shall be based on proper and reasonable agreement. Furthermore, GR No.28/2009 stipulates that mining services business companies must hold a business license for mining services issued by the relevant authorities. The license is valid for 3 years and is extendable.
Mining services companies must fulfill certain obligations once they have obtained their Business License for Mining Services (IUJP – Izin Usaha Jasa Pertambangan) and Registration Certificate (SKT – Surat Keterangan Terdaftar). These obligations are provided in Article 23 of GR No.28/2009 and include submitting reports to the relevant authorities quarterly and annually. The information that these reports must contain is specified in Article 24 of GR No.28/2009.
The relevant authorities can impose an administrative sanction if the holder of a Mining Business License (IUP) or Special Mining Business License (IUPK) (i) conducts activities not listed in its business license (i.e. its IUJP or SKT), (ii) fails to submit a quarterly report, (iii) does not fulfill its obligations as stipulated in the regulation, (iv) fails to provide the required documents or information or falsifies documents. Possible administrative sanctions include (i) a warning letter, (ii) suspension of part of or all mining services activities; or (iii) cancellation of the business license.
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