Tuesday, February 02, 2010

IUP ( Mining Business License)

( IUP /Mining Business Permit )
Chapter VII Part I 
Law No 4 Year 2009

Article 36
(1) IUP consists of 2 Stages :
a. IUP Exploration which  covers General Survey, Exploration and Feasibility Studies
b. IUP Production Operation which covers Construction activity, Mining, processing and purifying,  transportation and sales.
(2) IUP Exploration and the holder of IUP Operation Production can perform part or the entire of the activities as meant under paragraph (1)

Article 37

IUP is granted  by :

a) Bupati/Walikota if the WIUP ( Mining Business Permit Area)  is located  in 1(one)  Kabupaten/City Area 
b) Governor if WIUP is located in the Kabupaten ( Regency) /City Cross Area in 1 (one) province after obtaining recommendation from the Head of Regency/City of such place in accordance with the rules and law.
c. Minister if the WIUP is located in the province cross area after obtaining recommendation from the Governor/Bupati/Walikota(Mayor) of such place in accordance with the rules and law 

Article 38 
This IUP is granted to :
a. Legal Entity

Note :

Based on the above, it appears that the Granting of  the  IUP ( Mining Business Permit)  is not related to the measurement area of the Mining Area, but is more emphasized to the Location of such Mining Area or Mining Business Permit Area.

Coal Mining in IndonesiaINDONESIA: Construction plans for proposed $20,000,000 coal mining operation, PT TIMAH [Indonesia] - Order #: 064303.: An article from: WWP-Report on Mining, Metal Making and Conversion

For instance if a Mining Coal Area is located in 1(one) Kabupaten (Regency) /City(kota) than the Bupati or Major is the Authorized Officer who grants such IUP. The next question shall be whether such request for IUP is based on tender of such Mining Coal Area conducted by the Bupati/Major. In order to answer such question we have to check more further on the rulings under such New Mineral and Coal Law No 4 Year 2009.

From our research with the Directorate Technical Mineral and Coal, it appears that checking  must be made to the Directorate Pengusahaan within the Directorate Technical Mineral and Coal. It appears that there  is a  reorganization within the Directorate Technical Mineral and Coal, where there will be a Directorate of Mineral and Director Of Coal where at this present moment the Directorate of Coal according to the staff that I asked appears to be no longer existing.

We also found out from the information given by said staff  from  he Directorate Technical Mineral and Coal, that the PP or Governmental Regulation as the implementation of the Law No 4 Year 2009 had not yet been issued. Relating to the news in the Kompas which raised uncontrolled Coal Mining Activities in Kalimantan which was granted in the overlaping Forestry Conservation Area,  and the Non-Reclamation of the Holes left by the Coal Mining Area, we were informed by the staff of the Directorate Technical of Mineral  and Coal that the  Directorate Of Coal  were  the first  Government Institution to implement the Autonomy ruling on the issuance of this IUP or  formerly KP. He also indicated that inputs to the Newspaper usually came from the LSM (Non-Governmental Organization).  However, it seems that the Bupati in granting the Mining Authority does not observe and investigate  whether the location of the Coal  Mining KP which is granted to a Coal Mining Contractor is overlapping with the Forestry Conserve Area.

I  mentioned to the staff of the Directorate Technical of Mineral and Coal, that as a Business Lawyer we have to give clear certain legal data to our Clients who are Coal Mining Companies and intending  to invest their money in the Coal Mining Sectors in Indonesia, who needs legal certainty on the application of this IUP.

We have to be certain that the IUP (Mining Business License)  is granted by the proper Authority either from the Regional Level or at the Central Level, pursuant to the Mineral and Coal  Laws  No.4 Year 2009  and its implementation rulings to avoid overlapping with the Forestry Conservation Area, which could result loss of  monies  invested   in the Coal Mining Sectors in Indonesia suffered by the Coal Mining Investors as raised in the Kompas Media Newspaper recently dated around 26, 27 January 2010.

Drilling Rig

Drilling Rig
oil gas