Mining in Indonesia: Government May Revoke Troubled Mining Permits
Indonesia’s Ministry of Energy and Mineral Resources may revoke the Mining Business Permit (Izin Usaha Pertambangan, or IUP) of 4,643 local mining companies at the end of January 2015 as these companies still lack the clean and clear certificate (CnC) from regional authorities. This CnC certificate indicates that the mining company has no outstanding royalty and other tax debts, fulfilled its exploration and environmental commitments, has no property delineation issues and obtained the necessary forestry permits.
R. Sukhyar, General Director of Coal and Minerals at the Ministry, warned that - based on Law No. 4/2009 regarding Mineral and Coal Mining - the government holds the power to revoke mining permits when miners do not comply with current rules. The Ministry of Energy and Mineral Resources urged Indonesia’s regional governments to make serious efforts to provide the CnC certificate to local miners (after inspecting the companies’ corporate and financial details) before the end of the month. Sukhyar added that the central government has begun to restructure the country’s IUP framework in 12 mining producing provinces¹ since early 2014. These efforts also involved the participation of other institutions such as the Corruption Eradication Commission (Komisi Pemberantasan Korupsi, abbreviated KPK) and the Tax Directorate General (Direktorat Jenderal Pajak, DJP). In 2014, a total of 275 IUPs were revoked.
At the end of 2014 there were a total of 10,643 IUP-holders in Indonesia, of which 4,643 still have not obtained the CnC certificate.
Further Reading:
• Overview of the Coal Mining Industry in Indonesia
• Coal Mining Industry Indonesia: Higher Royalties for IUP-Holders
• Coal Mining in Indonesia: Safeguarding Future Energy Sources
• Indonesia Coal Update: Export, Production and New License System
¹ These 12 provinces are East Kalimantan, Central Kalimantan, South Kalimantan, West Kalimantan Southeast Sulawesi, Central Sulawesi, North Moluccas, Jambi, Riau Islands, Bangka Belitung, South Sumatra, and South Sulawesi.