- Government Regulation No 1 of 2017 regarding the Fourth Amendment to Government Regulation No. 23 of 2010 on the Implementation of Mineral and Coal Mining Business Activities.
- Regulation of the Minister of Energy and Mineral Resources (MEMR) Number 5 of 2017 on Increasing Added Value Through Domestic Processing and Refining of Minerals.
- Regulation of the MEMR Number 6 of 2017 on Procedures and Requirements to Obtain Recommendations for Export Sale of Mineral Resulting from Processing and Refining.
Certain regulations had been promulgated in 2014 (2014 Regulations) under Law No. 4 of 2009 on Mineral and Coal Mining (Mining Law 2009) and these regulations provided that minerals exploited by miners must be processed domestically. The objective of 2014 Regulations was to encourage mining companies to construct smelters and other infrastructure to refine and add value to the minerals before export.
Impact of these new regulations (dated March 2017)
The impact of these new regulations is twofold:
- First, there has been an apparent relaxation on the ban on the export of unprocessed minerals imposed by virtue of the 2014 Regulations.
- Second, that all foreign investors must divest their majority stake in Indonesian mines by the end of the tenth year of production.
Export permits
The new regulations provide that local miners can now apply to the MEMR for permission to export unrefined mineral concentrates (copper), washed ore (bauxite) and low grade ore (nickel) provided that they:
- Convert their existing “Contract of Work” (a form of mining concession granted prior to the Mining Law 2009) into a Special Mining Business Permit (Izin Usaha Pertambangan Khusus (IUPK)) under the Mining Law 2009.
- Seek approval to export from the Ministry of Trade on an annual basis.
- Fulfill their domestic supply obligations to local refineries and processing plants.
The MEMR has already indicated that the policy intent of these new regulations was to stay faithful to the objectives of the Mining Law 2009. Accordingly, permission to export unrefined mineral concentrates will only be granted to those mining companies that hold an IUPK (or a Mining Business Permit/Izin Usaha Pertambangan (IUP)) and that "
can demonstrate that they have made progress on the development of their refineries and processing infrastructure."
The MEMR has also indicated that these export permits will be reviewed every six months and these permits will be revoked if it is deemed that the miner has made insufficient progress with its development activities.
Thought this was interesting in relation to DSO sales.
Could it be that GMC will need for there smelters to arrive in Kupang before approval will be given. I'm only thinking this as they predicted this would be done in Q4 2017 along with approval of DSO sales.
Does GMC hold an IUP or IUPK?
I can not seem to find any information regarding this?
Cheers
