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Mining Law in Indonesia governs the exploration, exploitation, processing, and export of minerals and coal. This field of law is shaped by a mix of statutes, regulations, and policies developed by the Indonesian government to ensure sustainable mining activities, protect the environment, and promote investment. The cornerstone of Indonesian mining law is Law Number 4 of 2009 on Mineral and Coal Mining (often referred to as the Mining Law), as amended by the Job Creation Law of 2020. These laws define the legal framework for the issuance of mining licenses, obligations for environmental management, royalty payments, divestment requirements, and relationships with local communities.
There are several situations where legal guidance is crucial in Indonesian mining operations:
Given the complexity and evolving nature of Indonesian mining law, support from an experienced lawyer can help prevent costly mistakes and protect your interests.
The key Indonesian laws and regulations governing mining include:
Failure to comply with these requirements can lead to administrative sanctions, suspension or revocation of mining permits, and potential criminal liability.
There are several types of mining licenses, including Exploration Mining Business Permits (IUP Eksplorasi), Production Operation Mining Business Permits (IUP Operasi Produksi), and Special Mining Business Permits (IUPK) for areas with specific characteristics or strategic importance.
Yes, but there are share divestment requirements. Foreign companies must gradually divest a percentage of their ownership to Indonesian entities after a certain period.
The process involves submitting an application to the Ministry of Energy and Mineral Resources or a relevant regional authority, demonstrating technical and financial capacity, conducting environmental assessments, and obtaining approval through the Online Single Submission (OSS) system.
Yes, mining companies are required to conduct Environmental Impact Assessments (AMDAL), implement reclamation and post-mining plans, and meet strict environmental standards set by the government.
Royalties vary by commodity. Coal, for example, is subject to different royalty rates depending on calorific value and mining method. Other minerals have their own schedules and government policies frequently update these rates.
Land acquisition can be complex, especially if it involves customary (adat) land or areas of high community interest. Proper stakeholder engagement and legal processes are critical to avoid disputes.
Violations can result in administrative sanctions, fines, suspension or revocation of permits, and in some cases, criminal prosecution against responsible parties.
Exports of certain unprocessed minerals are restricted or banned. The government encourages value addition and requires the development of local processing facilities (smelters).
Depending on the contract terms, existing permits or contracts may be subject to new regulations. This can involve renegotiation or adjustment to comply with current law and policies.
Mining permit validity can be checked with the Ministry of Energy and Mineral Resources, regional mining offices, or through official online portals such as the Online Single Submission (OSS) platform.
For further information or assistance, consider reaching out to:
If you need legal assistance in Indonesian mining law, consider the following steps:
Early legal advice can help you navigate complex regulations, avoid violations, and increase the success and sustainability of your mining operations in Indonesia.
