Indonesian miner are obliged to carry out further exploration accompanied by the preparation of mineral and coal reserve fund - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian miner are obliged to carry out further exploration accompanied by the preparation of mineral and coal reserve fund, said the official on Thursday (09/24). The regulation is contained in the article 112 of  Law Number 3 of 2020 concerning minerals and coal.

The special staff at the energy and mineral resources (EMR) ministry, Irwandy Arif, said the government still calculate the amount of the reserve funds. Some input from the Indonesian Geological and Mining Association is around 1 percent of the net profit, he adds.

Several countries, he said, have set the amount of reserve funds around 2.5 – 10 percent of the miner’ net profit. Developed countries have even set a higher percentage of the allocation of these mandatory funds. The government, Arif revealed, also considered the scale of the company as a determinant of the amount of the funds and it hoped will not interfere their cash flow.

Recently, the parliament has passed the “controversial” mining law. The revision law Number 4 of 2009 was completed in three months since the government sent the draft to House of Representatives.

Some articles were amended in the mining law includes the settlement of problems between sectors through the demarcation of processing and refining licensing authority between EMR and industry ministry and the guarantee of space utilization in areas that have been given to permit holders. Through this regulation, mining investigation and research activities can be carried out in all Indonesian legal areas, said the law.

Then, strengthening of added value enhancement policies by granting licensing time incentives for mining business licenses or special mining business permits integrated with processing or refining facilities. And, encourage exploration activities for mineral and coal deposit discovery through the assignment of investigations and research to state research institutes. state-ownwed enterprises, regional firm, or private entities by imposing obligations on the provision of reserve funds.

In addition, the law presenting a new permit, namely Rock Mining Permit, whose licensing mechanism is easier and simpler. Furthermore, reclamation and post-mining through the regulation of criminal sanctions for permit-holders who do not conduct reclamation and post-mining activities

The law also regulates the licensing period for integrated permit with metal processing or refining facilities or coal Development and utilization activities is given for a period of 30 years and is given an extension for 10 years for each extension after meeting the requirements.

Also, accommodating the constitutional court’ decision, the establishment of a mining area is conducted after being determined by the provincial government and the elimination of the minimum area size in the exploration mining business permit area. Th bill also contained the regulation of mineral or coal status without permission and determined as confiscated goods or state-owned property.

Beside, strengthening the role of state-owned enterprises, including the regulation that ex-concession permit and special mining permit areas can be stipulated as special mining permit areas whose bids are prioritized to state firm and get priority in purchasing divested shares.

At the end, continuation of contract of work or coal mining concession work agreement to special mining permit as continuation of operation by considering efforts to increase state revenue. And, adding the maximum area of ​​the people’ mining area, which was originally 25 hectares to 100 hectares and adding the type of regional income in the form of community mining fees

Based on data from the EMR ministry, until 2019 Indonesia’ coal reserves reached 37.6 billion tons of coal and resources were 149 billion tons of coal. While, nickel reserves amounted to 3.57 billion tones, copper 2.76 billion tones, iron 3.07 billion tons, gold 3.02 billion tones, bauxite 2.38 billion tones, and silver 2.76 billion tones.

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