The deliberation of a proposed new mining law is entering its final phase as the Government of Indonesia and the House of Representatives Commission VII on Energy and Mining have agreed on nine principles of the new mining bill.
Head of the committee for the deliberation of the mining law, Bambang Wuryanto said on Monday that the nine formulas (principles) of the new mining bill have been “harmonized” with the proposed omnibus law on employment creation. The new bill is now set to be further discussed at the House plenary session for final approval.
The ministry said that the new mining law will among others strengthen the government’s policy to push for the development of domestic smelters to generate greater value from the country’s mining commodities, encourage exploration activities to find new reserves, ensuring miners implement reclamation at their former mine areas, strengthen state-owned firms engaged in mining sector, and conversion of expiring mining contract of works and coal mining contract of works into IUPK special mining business license.
The nine principles of the new mining bill that would replace the current law no. 4/2009 on mining are enumerated as follows:
1. Guarantee that the central government will not alter the areas allocated for so-called mining business license area (or WIUP), Special WIUP, and People’s Mining Area (WPR), as well as ensure that the required permits will be issued.
2. Mining business operation is based on permit from the central government, which can delegate the issuance to the business permit to the governors.
3. Higher revenue share for provincial government from the mining sector to 1.5 percent from 1 percent previously.
4. Obligation for the IUP and IUPK miners to utilize mining roads (not public roads) in running their activities.
5. Obligation for IUP and IUPK miners to allocate funds for community development program, of which the minimum size of the funds shall be determined by the Ministry of Energy and Mineral Resources.
6. Obligation of mining firms controlled by foreign investors to gradually divest up to 51 percent of their shares to Indonesian entities.
7. Obligation of mining firms, both those which hold the IUP, OP and IUPK OP licenses, to allocate funds that can be used to find new reserves.
8. IUP OP or IUPK OP miners, prior to reducing or returning the WIUP or WIUPK to the government, are required to carry out reclamation and post mining programs with 100 percent success rate. The same obligation applies for former IUP and IUPK miners whose operating permit has expired.
9. In relation to mining inspector, the Minister of Energy and Mineral Resources holds responsibility in managing the budget, infrastructure and supervision of the mining inspector.
The ministry said that representatives of both the Government and the House have held discussions, since 18 February 2019 until 11 March 2020, to make amendments to the articles in the Mining Law no. 4/2009. Under the new mining bill, 143 articles which account for 83 percent of the total 217 articles in the current law no. 4/2009 have been revised.
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