New Mining Indonesia Regulation

coal and mining services

The Government of Indonesia has issued a regulation to implement the recent amendments made to the Mining Law. Principally, this new regulation, Government Regulation No. 96 of 2021 regarding the Operation of Mineral and Coal Mining Business (“GR 96/2021”), enacts a new licensing scheme for mining business activities and overhauls the divestment obligation for foreign investment companies holding a Mining Business License.

GR 96/2021 was issued following the enactment of Law No. 3 of 2020 and Law No. 11 of 2020 regarding Job Creation (together, the “Mining Law Amendment”), which amends Law No. 4 of 2009 regarding Mineral and Coal Mining (the “Mining Law”). GR 96/2021 serves as an implementing regulation to the Mining Law and replaces Government Regulation No. 23 of 2010 regarding the Operation of Mineral and Coal Mining Business, as amended several times, most recently by Government Regulation No. 8 of 2018 (“GR 23/2010”).

We discuss the key changes introduced by GR 96/2021.

Business Licensing

In line with the changes introduced under the Mining Law Amendment, GR 96/2021 introduces several changes to the mining business licensing regime. Under GR 23/2010, mining business activities were required to be implemented based on a Mining Business License (Izin Usaha Pertambangan, “IUP”), Community Mining License (Izin Pertambangan Rakyat, IPR”) or Special Mining Business License (Izin Usaha Pertambangan Khusus, “IUPK”). Now GR 96/2021 divides business licensing for mining activities into (i) Business Identification Number (Nomor Induk Berusaha, “NIB”); (ii) Standard Certificate; and/or (iii) License.

This new business licensing categorization is in accordance with Government Regulation No. 5 of 2021 regarding Risk-Based Business Licensing (“GR 5/2021”), where the required business licensing to engage in certain business activities is determined based on the level of risk of the activity. Mineral and coal mining are generally categorized as high-risk under GR 5/2021 and therefore require an NIB and License.

GR 96/2021 sets out the following Licenses for mining activities:

  • IUP;
  • IUPK;
  • IUPK as a Continuation of Operation Contract/Agreement;
  • IPR;
  • Rock Mining License (Surat Izin Penambangan Batuan, “SIPB”);
  • Assignment License (for the mining of radioactive minerals);
  • Transportation and Sales License;
  • IUP for Sales; and
  • Mining Service Business License.

    Obtaining a WIUP and WIUPK

    GR 96/2021 streamlines the process to obtain an IUP and IUPK. Similar to GR 23/2010, under GR 96/2021 the obtainment of an IUP and IUPK is preceded by securing a Mining Business License Area (Wilayah Izin Usaha Pertambangan, “WIUP”) or Special WIUP (WIUP Khusus, “WIUPK”). The key changes to the process for obtaining a WIUP and WIUPK are as follows:

    • WIUP

    Auction Process

    A WIUP for metal mineral and coal commodities is obtained by way of an auction. The Ministry of Energy and Mineral Resources (“MEMR”) will announce an auction for a WIUP between 14 and 60 days prior to the date of the auction. In the previous regime under GR 23/2010, auctions were announced by the MEMR or the relevant governor or regent/mayor at the latest three months prior to the auction date.

    Application for non-metal mineral WIUP

    A WIUP for non-metal mineral commodities is obtained by way of an application to the MEMR. To obtain a WIUP for non-metal minerals, applicants must fulfill administrative requirements, provide geographic coordinates prepared based on a national geographic information system, pay non-tax state revenue to reserve the mining area and for map-printing, and obtain approval from the relevant IUP or IUPK holder in cases where the proposed WIUP overlaps with existing IUP or IUPK areas.

    WIUP for non-metal minerals are granted on a first come, first served basis, whereby the first applicant to submit a complete WIUP application for an area shall be prioritized.

    GR 23/2010 did not specify the above requirements to obtain a non-metal mineral WIUP, only stating that applicants that had completed the geographic coordinates and paid the relevant non-tax state revenue would be prioritized in obtaining a WIUP. It also required the MEMR and the governor to obtain a recommendation from the relevant governor (for the MEMR) or mayor/regent (for the Governor), which is no longer the case with GR 96/2021.


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