Governance

Following are some of the crucial licenses and regulations that coal mining and trading companies need to follow in Indonesia.

  1. Exploration IUPs/IUPKs are granted for performance of general surveys, exploration and feasibility studies within a Mining Business Licence Area (WIUP) and Special Mining Business Licence Area (WIUPK) respectively.
  2. To sell coal and/or minerals extracted during the exploration phase, the holder of Exploration IUP/IUPK must obtain a Temporary Licence for Transport and Sales from the MEMR, Governor, or regent/Mayor.
  3. IUP-OPs/IUPK-OPs are granted for performing production operation activities such as construction, mining, processing and or refining, etc, within the WIUP and WIUPK respectively.
  4. IUP-OPs Specifically for Processing and/or Refining are granted specifically for purchasing, transporting, processing, and refining, as well as selling the mineral and coal commodities.
  5. IUP-OPs Specifically for Transportation and Sales are granted specifically for purchasing, transport, and selling the mineral and coal commodities.
  6. Business entities that are not engaged in the mining business but wish to sell their minerals or coals as a side impact of their mining activities are still required by MEMR Reg 11&22/2018 to obtain an IUP-OP for Sales. Examples of these business entities include those that run their businesses in the fields of construction of traffic facilities and infrastructures, port constructions, tunnel constructions, civil constructions, and/or dredging of river, lake, and/or sea.
  7. Mining Service Business Licence (IUJPs) are granted specifically for performing core mining service business activities in relation to certain phases/parts of the mining business activities, which include consultation, planning and implementation in a number of fields.
  8. Clean and Clear License (CNC). To obtain a clean and clear certificate, mining companies must prove they have no outstanding royalty and other tax debts; that rehabilitation funds have been collected and saved in a government bank account; that exploration and environmental commitments have been fulfilled; and that concession areas do not overlap with protected forest areas or with other companies’ concessions, including for palm oil and timber plantations.
  9. Indonesian Export Tax. Since early 2021, Indonesia government has levied an export tax for all outgoing shipments.