Understanding Indonesian Goals in Mining

• The Legal Sources of the General Mining Law in Indonesia is Article 33(2) and (3) of the Indonesian Constitutional Law.

What is Article 33 (2) and (3) of the Indonesian Constitution LAW ? Why you as a Foreign or Local General Mining Company who operates in Indonesia, must really understand this Famous Article which was "Planted" in the Indonesian Constitutional Law by the "Founding Fathers" of this Great Nation of Indonesia. Well, let me try to explain to you why this Article 33(2) and (3) of the Basic Constitution Law 1945 is really significant to be understood by the Mining Companies operating in Indonesia.

• Pursuant to this Article it states that the branch of productions which are important for the State and which exploits the mainstream live of the majority people shall be under the sovereign of the State.

• The earth and the water and the natural richness which is contained therein shall be under the control of the State and be used at the most for the welfare of the people.

• Furthermore the basic principal of the control and the beneficial of the natural richness upon the various mining minerals for the social welfare of the people in the mining activities shall be implemented under the Indonesian Mining Law.

• The Indonesian Nation as the holder of the Ownership Title upon the natural richness in the form of various mining minerals which is contained in the earth and water within the Indonesian Territory which is the "Indonesian Mining Legal Area", shall thereafter "grants the power" to the State to regulate and makes benefit of such national richness with the utmost to achieve the justice and prosperity of the society as a whole.

• Thus based on the above principals, The State has the Authorization Right ( Hak Penguasaan) upon such National Richness, whereas the execution/the performance of the State Sovereign is called " The General Mining Authorization".

• Since the State posses the right to control or the Authorization Right ( Hak Penguasaan) upon the various mining minerals, than the State cannot not grant other rights which is more larger then such Authorization Right.

• Accordingly, what can be given by the State is the General Mining Authorization Enterprise ( Kuasa Usaha Pertambangan Umum ) or abbreviated (Kuasa Pertambangan Umum) General Mining Authorization, which covers the general mining efforts ( usaha-usaha pertambangan umum : general survey, exploration, exploitation, pengolahan ( treatment ) and pemurnian (purification), transportation and selling.

• Furthermore, the State shall give the performance of the General Mining ( Pengusahaan Pertambangan Umum) to the holder of the Mining Authorization.

• Since there are many various mining minerals, the State needs to determine the categorization or grouping of such mining minerals and the performance of such mining minerals.

Agung Supomo Suleiman

Partner Law Firm Suleiman Agung & Co

http://www.sacolaw.blogspot.com

Email : agungsacolaw@telkom.net

Mobile Phone : 0816830647