Minerba Bill: IUP/IUPK Proposed to Have Reserve Fund for Deposit Discovery

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 173.Pers/04/SJI/2020

Date: 1 May 2020

Minerba Bill: IUP/IUPK Proposed to Have Reserve Fund for Deposit Discovery

The government through Ministry of Energy and Mineral Resources (EMR) has proposed that mining companies holding Operation-Production Mining Business License (IUP) and Operation-Production Special IUP must carry out advanced exploration annually and prepare a reserve fund to sustain deposit discovery.

Director General of Mineral and Coal of Ministry of EMR, Bambang Gatot Ariyono, in an online discussion held on Wednesday (29/4) said the rule would be included in the Mineral and Coal ('Minerba') Bill currently discussed with House of Representatives of Republic of Indonesia (DPR RI).

To date, Bambang added, mining companies had not carried out detailed exploration in the areas they owned. "We'll require that exploration be conducted in detail so that the government will get the actual data of the country's reserves," he explained.

According to Bambang, high-risk exploration activities need huge funds. For this reason, the government will introduce rules so that mining companies prepare exploration investment in the form of a reserve fund to be used to discover mineral and coal reserves. "This fund will be used to look for unexplored areas or to develop new areas," said Bambang.

Another step taken by the government in finding mineral and coal deposits is by issuing EMR Ministerial assignment to national research centers, State-Owned Enterprises (SOEs), Regional Government-Owned Enterprises, or private enterprises to carry out general surveys. The assignment is aimed to prepare Mining Business License Area (WIUP) for coal and WIUP for metals. "However, these enterprises do not automatically have the right to manage the work areas; there will be further regulations," Bambang stated.

Meanwhile, in terms of the prohibited transfer of IUP and IUPK from the holders to other parties set out in Law Number 4 of 2009, the Minerba Bill will explain in more detail that transfer will only be allowed after Minister of EMR or the Governor, according to their authority, approves the transfer request under the condition that exploration activities be completed, resource/reserve data be available, and administrative, technical, and financial requirements be met.

The Minerba Bill contains 13 key issues proposed by the government and the DPR. Seven key issues were proposed by the government, namely completion of intersectoral problems, reinforcement of the mining area concept, reinforcement of the added-value increase policy, support for exploration activities to discover mineral and coal deposits, special regulation on Rocks Business License/Rocks Mining License (SIPB), reclamation and post-mining, and license period for integrated IUP and IUPK.

Meanwhile, another six key issues were jointly proposed by the government and the DPR, namely accommodation to Constitutional Court's decision and Law No. 23 of 2014, reinforcement of government's role in fostering and monitoring to regional governments, reinforcement of SOEs role, continuation of KK/PKP2B operations, people's mining license, and availability of mineral and coal national management plan. (IY)

Head of Bureau of Communication, Public

Information Services, and Cooperation

Agung Pribadi (08112213555)

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