IUJP UNDER THE REGULATION OF MINISTRY OF ENERGY AND MINERAL RESOURCES NO. 34 YEAR 2017 ON LICENSES IN THE SECTOR OF MINERAL AND COAL MINING

IUJP UNDER THE REGULATION OF MINISTRY OF ENERGY AND MINERAL RESOURCES NO. 34 YEAR 2017 ON LICENSES IN THE SECTOR OF MINERAL AND COAL MINING

 

Ministry of Energy and Mineral Resources Regulation No. 34 of 2017 on Licenses in the Sector of Mineral and Coal Mining (“MOEMR 34/2017”) was enacted and valid as of 09 May 2017. It revokes the previous regulations of Ministry of Energy and Mineral Resources Regulation No. 28/2009 and No. 24/2012 on the Operation of Mineral and Coal Mining Service (“Previous Regulations”).

MOEMR 34/2017 makes some amendments to the provisions on IUJP. They are among others as follows:

 1.      Mining Service Business License/IUJP (Izin Usaha Jasa Pertambangan)

- Bupati/Head of Regency is no longer entitled to issue IUJP. Only Minister of Energy and Mineral Resources (“Minister”) and Governor are entitled to issue the IUJP.

-IUJP will be provided by the Minister if the mining services business activities is to be conducted in all Indonesian territory and it is applied for by a legal entity including PMA and that IUJP will be provided by the Governor if the mining services business activities is to be conducted within one province and it is applied for by a legal entity, cooperative or individual person.

-In line with the applicable investment negative list under Presidential Regulation Number 44 year 2016, Article 19 (2) of MOEMR 34/2017 confirmed that a PMA with 100% foreign owned capital can engage in the business of mining services.     

 

2.      Simplification of scope of mining services 

The Previous Regulations differentiated the mining services into 2 categories namely (i) the core mining services and (ii) the non-core mining services, which pursuant to the attachment 1B of the Previous Regulations, they were for example catering service, security services, health services, labor outsourcing service, rental of the mining equipment; etc.

MOEMR 34/2017 does not mention 2 categories of mining services as previously referred to and that such term of core and non-core mining services are no longer used under MOEMR 34/2017.

Article 21 of MOEMR 34/2017 stipulates that IUJP/mining services business license covers the activities of: (i) consultation, planning and execution in the field of exploitation, exploration, feasibility study, mining construction, transportation, mining  environment, post mining and reclamation and/or work safety and health; and (ii) consultation and planning in the field of mining, or processing and refining. The business classification of mining services mentioned above consists of sub-classifications as they are listed in Attachment IVB of MOEMR 34/2017.

Holders of IUP/mining business license and IUPK/Specific mining business license can cooperate with holder of IUJP to support mining business activities mentioned in Article 21 of MOEMR 34/2017. To conduct supporting business activities other than the activities mentioned in Article 21 of MOEMR 34/2017, the IUP/mining business license and IUPK/Specific mining business license can cooperate with other party who is announced by the Minister of the Governor in line with their respective authority, as having obtained registration code/tanda registrasi.

 

3.      Period of IUJP and its extension period

The same as the Previous Regulations, MOEMR 34/2017 stipulates that IUJP is valid for 5 (five) years but MOEMR 34/2017 expressly stipulates that an extension can be granted for 3 (three) years subject to satisfactory of the fulfillment of requirements.

The Previous Regulations required the application for extension to be submitted at the latest 1 month before expiry date of the IUJP. MOEMR 34/2017 requires it to be submitted 6 months before and the latest 2 months before the expiry date of IUJP.

 

4.   Amendment to certain Reporting Obligation

The submission of every contract entered by the IUJP holder with an IUP holder to the issuer of its IUJP (at that time, the Minister, Governor or Bupati) which was required under the Previous Regulations is no longer required under MOEMR 34/2017.

The same as the Previous Regulations, MOEMR 34/2017 prohibits IUJP holder to own mining license (IUP/IUPK).

 

Disclaimer: This article is intended as general information only and it does not constitute a legal advice. We accept no responsibility for any loss that may arise from reliance on this information. Please contact us if you need full legal advice.