Indonesian coal miners holding the coal contract of work (locally known as PKP2B) would not automatically get renewal of their operating permits upon expiry as they have to meet a number of requirements as set under the new mining law.
Special Staff to the Minister of Energy and Mineral Resources, Irwandy Arif said recently that while the new mining law guarantees the conversion of PKP2B into special mining business license (or IUPK) upon their expiry, the law also clearly stipulates that the miners must fulfill a number of requirements.
Irwandy explained that the requirements among others are higher revenue for the state including possible increase in royalty, and evaluation of the miners’ performance with regards to good mining practices and environmental preservation.
He said that a new government regulation will be issued to provide details about the requirements.
“So, renewal of the operating permit is not automatically, and there must be evaluation with certain requirements”, he said.
The House of Representatives approved on 12 May the new mining law, which is an amendment of Law No 4/2009 on mineral and coal mining. According to the new law, renewal of operating permit takes into consideration higher revenue for the state. Minister of Energy and Mineral Resources can turn down request made by a miner for an extension of its operating permit, if the PKP2B miner can’t show good mining performance.
A number of first generation PKP2B coal miners are set to see their operating permits or contracts expire within the next year few years. These include PT Arutmin Indonesia whose contract will expire on Nov. 1, 2020, PT Kendilo Coal Indonesia (Sept. 13, 2021), PT Kaltim Prima Coal (Dec. 31, 2021), PT Multi Harapan Utama (April 1, 2022), PT Adaro Indonesia (Oct. 1, 2022), PT Kideco Jaya Agung (March 13, 2023), and PT Berau Coal (April 26, 2025).
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