regulatory update on mining
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Mining Regulatory Progress in 2018R
evo
ked
• MEMR Regulation No. 12 Year 2011
• MEMR Regulation No. 28 Year 2013
• MEMR Regulation No. 25 Year 2016
• MEMR Regulation No. 34 Year 2017
• MEMR Regulation No. 15 Year 2017
• MEMR Decree No. 1453 Year 2000
• MEMR Decree No. 0617 K/32/MEM/2011
• MEMR Decree No. 2555.K/201/M.PE/1993
• MEMR Decree No. 103.K/008/M.PE/1994
• MEMR Decree No. 620.K/008/M.PE/1994
• MEMR Decree No. 2202.K/201/M.PE/1994
• MEMR Decree No. 134.K/201/M.PE/1996
• MEMR Decree No. 135.K/201/M.PE/1996
• MEMR Decree No. 1614 Year 2004
• DGMC Regulation No. 714.K/30/DJB/2014
• DGMC Regulation No. 842.K/30/DJB/2015
Am
en
ded
• Government Regulation No. 8 Year 2018
• MEMR Regulation No. 19 Year 2018
New
Reg
ula
tio
n • Presidential Regulation No. 13 Year 2018
• MEMR Regulation No. 11 of 2018
• MEMR Decree No. 1395 K/30/MEM/2018 as amended by MEMR Decree No. 1410K/30/MEM/2018
• MEMR Decree No.23K/30/MEM/2018
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The following regulation are revoked:
a. MEMR Regulation No. 12 Year 2011 concerning Procedure for Determination of Mining Area and Information
System of Mineral and Coal Mining Area
b. MEMR Regulation No. 28 Year 2013 concerning Procedure for Auction of Mining License Area and Special Mining
License Area in Metal Mineral and Coal Mining Business Activities
c. MEMR Regulation No. 25 Year 2016 concerning Amendment of MEMR Regulation No. 12 Year 2011
d. MEMR Regulation No. 34 Year 2017 concerning Licensing in the Filed of Mineral and Coal Mining
e. MEMR Regulation No. 15 Year 2017 concerning Procedure for Granting of Production Operation Special Mining
License as Continuation of COW and CCOW Operation
f. MEMR Decree No. 1453 Year 2000 concerning Technical Guidelines for Implementation of Government Obligation
in the Field of General Mining
Regulations on Mining that are Revoked
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g. DGMC Regulation No. 714.K/30/DJB/2014 concerning Procedure and Requirement for Granting the
Recommendation of ET-Coal
h. DGMC Regulation No. 842.K/30/DJB/2015 concerning Procedures and Requirements for granting the
Recommendation of ET-Tin and Export Approval of Pure Tin
i. MEMR Decree No. 0617 K/32/MEM/2011 concerning Coal Price for PT PLN in order to Operation of Steam Power
Plant
j. MEMR Decree No. 2555.K/201/M.PE/1993 concerning Implementation for Mining Inspection of General Mining
Field
k. MEMR Decree No. 103.K/008/M.PE/1994 concerning Supervision on the Implementation of Environmental
Management Plan and Environmental Monitoring Plan in the Field of Mining and Energy
l. MEMR Decree No. 620.K/008/M.PE/1994 concerning Environmental Impact Analysis Commission of Mining and
Energy Department
Regulations on Mining that are Revoked
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m. MEMR Decree No. 2202.K/201/M.PE/1994 concerning Granting of Preliminary Investigation Letter in Order to
Foreign Investment or Domestic Investment in General Mining Sector
n. MEMR Decree No. 134.K/201/M.PE/1996 concerning Utilization of Maps, Explanation of Limit and Area of Mining
Rights, COW, and CCOW in the Field of General Mining
o. MEMR Decree No. 135.K/201/M.PE/1996 concerning Verification of Capability and Ability of Applicant of Mining
Rights, COW, and CCOW
p. MEMR Decree No. 1614 Year 2004 concerning Guidelines for Processing of COW and CCOW Applications in
order to Foreign Investment
Regulations on Mining that are Revoked
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The following regulation are amended:
a. Government Regulation No. 8 Year 2018 concerning Fifth Amendment of Government Regulation No. 8 Year 2010
on The Implementation of Mineral and Coal Mining Activities
This Regulation insert Article 85A which regulates the coal sale price determination by MEMR with respect to the
fulfillment of the needs of coal for the domestic.
b. MEMR Regulation No. 19 Year 2018 Concerning Second Amendment of MEMR Regulation No. 19 Year 2018 on
Procedure for Determination of Sale Benchmark Price of Metal Mineral and Coal
This Regulation insert Article 8A which regulates the authority of MEMR to determine the coal sale price for
domestic needs. This regulation further stipulates that the selling price shall be determined in accordance with the
coal quality and public interest.
Regulations on Mining that are Amended
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Main points under the MEMR Regulation No. 11 of 2018 concerning Procedures of Granting of Mining
Area, Licensing, and Reporting of Mineral and Coal Mining Business Activities:
A. Revocation and/or simplification of license, recommendation and license requirement
B. Granting of the Mining Area (WIUP/WIUPK)
C. Transitional provisions
New Regulations1. MEMR Regulation No. 11 Year 2018
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
1. Registration Certificate for Transportation and Sale
(TR)
Changed and become IUP OPK for Transportation
and Sale
2. Principle License for Processing and Refining Revoked and only issue IUP OPK for Processing
and Refining
3. Recommendation for Foreign Workers Revoked and directly submit to the Ministry of
Manpower and Transmigration
4. RKAB of IUJP RKAB in accordance to the contract with IUP/COW/
CCOW holder
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
5. RKAB of IUP OPK for Transportation and Sale Revoked
6. Certification of equipment Revoked
7. Recommendation for ET-Coal Revoked
8. Recommendation for ET-Tin Revoked
9. Recommendation for Approval Letter of Tin Export Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
10. Certification of Technical Personnel Revoked
11. Certification of Clean and Clear Revoked
12. Approval for Exploration Report Revoked
13. Approval for changes in investment and financing
plan, included the change in paid up capital and
subscribed capital
Included in RKAB
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
14. License for Transportation, Storage/Stockpiling, or
Explosive Utilization and Recommendation for
Purchase of Explosive
Included in RKAB
15. License for Construction of Storage/Stockpiling of
Liquid Fuels
Included in RKAB
16. Approval for the Execution of Sleep Blast Included in RKAB
17. Installation Feasibility Certificate Included in RKAB
18. Approval for Dredger Operation Plan Included in RKAB
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
19. Recommendation for Import, Re-Export, Temporary
Import Facility
Included in RKAB
20. Recommendation for Import Identification Number of
Producer (API-P)
Included in RKAB
21. Approval for Coal Blending Activities from IUP, IUP
OP, or IPR
Included in RKAB
22. Approval for Analysis Method of Determination of
Free Silica Content in Dust
Revoked
23. Approval for Special Measurer of Underground Mines Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
24. Approval for Undercutting Excavation on Surface
Mine
Revoked
25. Approval for Safety Implementation Guideline Revoked
26. Approval for High Levels more than 20 meters on
Layers Containing Sand, Clay, Gravel, and Other
Materials
Revoked
27. Approval for High Levels more than 15 meters on
Compact Material Layers
Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
28. Registration Certificate (SKT) Revoked
29. Approval for Education and Training Program held by
KTT
Revoked
30. Approval for Mine Mouth Power Plant Price Revoked
31. Approval for Change in Equipment Construction of
Land Mover
Revoked
32. Approval for Addition and Reduction of Natural Buffer
Size on Underground Mine
Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
33. Approval for Utilization of Natural Ventilation on
Underground Mine
Revoked
34. Approval for Installation or Utilization of Electrical
Equipments for the Detection or Measuring of
Flammable Gases
Revoked
34. Approval for Lighting of Underground Mine Workers Revoked
35. Approval for Measurement Procedures and
Measurements Equipments of Radon Derived
Concentrations or Alpha Radiation Energy
Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
36. Approval for Inspection Standard of Gamma
Radiation
Revoked
37. Approval for Utilization of Portable Electrical Light on
Hazardous Mines of Gases
Revoked
38. Approval for Detection Equipments of Methane
Gases on Underground Mine
Revoked
39. Validation for Underground Mining Closure Revoked
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A. Revocation and/or Simplification of License, Recommendation, and License Requirement
New Regulations1. MEMR Regulation No. 11 Year 2018
No. Type of License / Recommendation /
Approval / License Requirement
Explanation
40. License for Utilization of Electrical Weld on
Underground Coal Mine or Mine Area which contains
Flammable Gases
Revoked
41. Approval for Breathing Apparatus Revoked
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B. Granting of the Mining Area (WIUP/WIUPK)
There are several changes for granting the WIUP/WIUPK, which are:
1. In the event of the Governor is granting the non-metal mineral or rock WIUP, then it shall obtain a recommendation from the
Regent/Mayor. The recommendation is granted by Regent/Mayor within 5 working days from the receipt of the application
and if the recommendation is not issued within 5 days, then the recommendation is deemed granted.
2. The recommendation from the Regent/Mayor regarding the issuance of non-metal mineral or rock WIUP is containing land
use information, and conformity to the mining designated area.
3. The issuance of metal mineral, non-metal mineral, coal and rock WIUP in which there is a radioactive WUP, then shall obtain
a recommendation from government institution in the field of nuclear
4. The auction announcement shall be made no later than 1 month prior to the auction (in the previous regulation, the auction
announcement shall be made for 3 months prior to the auction)
5. Changes in the procedures for granting the Exploration WIUPK by priority and auction mechanism
New Regulations1. MEMR Regulation No. 11 Year 2018
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The Concept of Offering and Auction for WIUPK
New Regulations1. MEMR Regulation No. 11 Year 2018
No. BUMN
(Interested)
BUMD
(Interested)
Action Explanation
1. Yes No Directly appoint to BUMN BUMN should establish a new Enterprise (Joint Venture) with condition is the
shares should given to BUMD at least 10%
2. No Yes Directly appoint to BUMD There are two ways to operate in the WIUPK:
a. BUMD may establish an Enterprise (Joint Venture) with condition is the
shareholder consists of BUMD and BUMS (maximum 49%); or
b. Operate itself
3.
Yes Yes Auction (If BUMN win) BUMN should establish a new Enterprise (Joint Venture) with condition the
shares should given to BUMD at least 10%
Yes Yes Auction (if BUMD win) There are two ways to operate in the WIUPK:
a. BUMD may establish an Enterprise (Joint Venture) with condition is the
shareholder consists of BUMD and BUMS (maximum 49%); or
b. Operate itself
4. No No Auction for Private Enterprise
(BUMS)
In the events that a BUMS is the winner of the auction, then it may operate in
the WIUPK with obligatory 10% participation by BUMD (4%by BUMD at
provincial level and 6% by BUMD at regency level)
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The Concept of Offering and Auction for WIUP
New Regulations1. MEMR Regulation No. 11 Year 2018
No
.
WIUP Area BUMN
(Participant)
BUMD
(Participant)
BUMS
(Participant)
Cooperation
(Participants)
Individual (Maatschap,
Commanditaire
Vennootschap, or Firm)
(Participant)
Foreign Investment
Company
(Participant)
1. Less than or
equal to 500 Ha
No Yes Yes Yes Yes No
2. More than to 500
Ha
Yes Yes Yes Yes No Yes
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C. Transitional Provision
a. The IUP OPK for processing and/or refining holder that already has the KTT and appointed by the Head of Mine
Inspector is still valid as person in charge of technical and environmental
b. The approval for the Partnership Program of the alluvial mineral which has been issued by the Minister is still valid
until the expiry and shall be adjusted to this MEMR
c. Registration Certificate (TR) is no longer required to conduct activities in non-core mining services business
d. Registration Certificate (TR) for transport and sale that has been issued before the effective date of this MEMR
Regulation shall adjusted to IUP OPK for Transportation and Sale within 6 months from the effective date of this
MEMR
e. Annual RKAB which has been submitted and/or approved, is still valid and shall be adjusted
f. The provisions concerning the Annual RKAB approval and the change of shares as well as BOD and/or BOC shall
be applied to COW and CCOW
New Regulations1. MEMR Regulation No. 11 Year 2018
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C. Transitional Provision
g. The activity of the COW and CCOW shall be adjusted to be:
• Exploration activities, including general surveys, explorations and feasibility studies
• Production operation activities, including construction, mines, processing and/or refining, as well as
transportation and sale
• Activity adjustment of COW and CCOW shall be executed within 6 (six) months since the effective date of this
MEMR
h. Recommendation for ET-Tin is no longer required
i. Recommendation for ET-Coal is no longer required
j. Clean and Clear Status and/or Clean and Clear Certificate which has been issued is still valid
New Regulations1. MEMR Regulation No. 11 Year 2018
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C. Transitional Provision
k. Non-metal mineral IUP or rock IUP which was issued prior to this MEMR does not require clean
and clear status and/or clean and clear certificate
l. The IUPs to be issued subsequent to this MEMR does not require clean and clear status
New Regulations1. MEMR Regulation No. 11 Year 2018
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This Decree is regulated several matters related to the coal sale price for the electrical supply for the
public interest, which are:
a. The sale price is amount of USD 70 per metric ton of Free On Board (FOB) Vessel, which are
based on the reference specification on calories 6.322 kcal/kg GAR, Total Moisture 8%, Total
Sulphur 0.8%, and Ash 15%.
b. In the case of the coal specification is different from the specifications as stipulated in Point a and
Reference Coal Price is > USD 70/mt, it shall be calculated using the Coal Price formula as
governed in Appendix I of the Decree.
New Regulations2. MEMR Decree No. 1395 K/30/MEM/2018 as amended by MEMR Decree No. 1410K/30/MEM/2018
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c. In the case of the coal specification is different from the specifications as stipulated in Point a and
the Reference Coal Price is < USD 70/mt, it shall be calculated using the Coal Price formula as
governed in Appendix II of the Decree.
d. Fulfillment of production royalty obligations by IUP OP, IUPK OP, and CCOW holders as stipulated
in Point a and b, shall be calculated with the following formula:
Production Royalty = (Production Royalty Rate Formula) x (Sales Volume) x (Sale Price).
e. Fulfillment of production royalty obligations by IUP OP, IUPK OP and CCOW as stipulated in Point
c, shall be calculated with the following formula:
Production Royalty = (Production Royalty Rate Formula) x (Sales Volume) x (Benchmark
Price of Coal).
New Regulations2. MEMR Decree No. 1395 K/30/MEM/2018 as amended by MEMR Decree No. 1410K/30/MEM/2018
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f. IUP OP, IUPK OP, and CCOW holders which has fulfilled minimum percentage of coal sales for domestic needs
pursuant to the applicable MEMR Decree and comply to the provisions of Coal Sale Price as stipulated in Point a,
b or c, may be granted an increase in production at the maximum of 10% (ten percent) of the approved production
capacity.
g. This obligation has been effective since March 9, 2018 until December 31, 2019 with the maximum total sales
volume of coal at 100 (one hundred) million metric tons per year. The price that set forth in the agreement which is
made before the date of this MEMR Decree, is still valid and binding.
h. Minister of Energy and Mineral Resources Decree No. 0617 K/32/MEM/2011 is revoked.
The determination of the coal sale price in this decree applies only to the electrical supply for the public
interest and domestic needs, not for other purposes, such as export, mine mouth power plant1
1 MMPP shall refer to MEMR Regulation No. 24 Year 2016
New Regulations2. MEMR Decree No. 1395 K/30/MEM/2018 as amended by MEMR Decree No. 1410K/30/MEM/2018
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This MEMR Decree regulates about Minimum Percentage Determination of Coal Sales for Domestic
Interests in 2018, as follows:
a. The minimum percentage of Domestic Market Obligation (DMO) is 25%
b. The IUP OP and CCoW holders shall comply to this minimum percentage, which is set at the
amount of 25% of the total production plan in 2018
c. Sanctions for the IUP OP and CCoW holders that do not fulfill this minimum percentage are as
follows:
• Reduction of production total in the next year of RKAB
• Reduction of export quota
New Regulations3. MEMR Decree No. 23K/30/MEM/2018
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This Presidential Regulation No. 13 Year 2018 regulates about Beneficial Owner, as follows:
a. Every corporation is obliged to disclose its Beneficial Owner. This “Know the Beneficial Owner” principle shall
encompass identification and verification of the Beneficial Owner. The principle shall be implemented during
establishment of the corporation, registration, legalisation, approval submission, licensing submission and
throughout the operation of a corporation.
b. The subject of this Presidential Decree are legal entities or non-legal entities having an association of individuals
and/or organized assets (“Corporation”), including:
• limited liability companies;
• foundations;
• associations;
• cooperatives;
• partnerships (CV);
• firms; and
• other forms of corporations
New Regulations 4. Presidential Regulation No. 13 Year 2018
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c. Beneficial Owner is defined as individuals who are:
• authorized to appoint or terminate the board of directors, board of commissioners, managers, facilitators, or
supervisors of a Corporation;
• capable to control a Corporation;
• entitled to directly or indirectly receive benefits from a Corporation;
• the true owner of the funds or shares of a Corporation; and
• considered to have satisfied the requirements as governed under the Presidential Regulation No. 13/2018
d. The Corporation is obliged to renew the Beneficial Owner Information periodically every 1 year.
e. Any Corporation who has completed or still in the process of Establishment/Obtainment of License, is obliged to
implement the Presidential Regulation No. 13/2018 and submit its Beneficial Owner Information no later than 1
year as of 5 March 2018.
New Regulations 4. Presidential Regulation No. 13 Year 2018
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1. Revision to the Law No. 4 of 2009
2. Mining Policy
3. Government Regulation regarding deadrent and royalty
4. Various implementation guidance of MEMR Regulation No. 11 of 2018
Drafts and on going regulatory project
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