Jurisdiction - Indonesia
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Indonesia – Regulation On Mineral Processing and Refining Revoked.

2 December, 2013

 

Legal News & Analysis – Asia Pacific – Indonesia – Energy & Project Finance

 

The Supreme Court has ruled that the Minister of Energy and Mineral Resources (ESDM) must revoke ESDM Regulation No. 7 of 2012 regarding Increasing Added Value through Mineral Processing and Refining Activities (ESDM Reg. 7).

 

The Regulation was held to conflict with the Indonesian Mining Law, at least insofar as the refining and processing of raw minerals is concerned. Article 21 of ESDM Reg 7 provides that exports of raw minerals will not be permitted three months after February 6, 2012, (i.e., May 5, 2012). The Mining Law imposed this requirement on holders of Contracts of Work (Kontrak Karya) starting January 12, 2014, but not on holders of Mining Business Licenses (IUPs), whereas ESDM Reg 7 applied to both.

 

SSEK understands that the Minister of Energy and Mineral Resources also considers the Mining Law to apply to IUP holders, notwithstanding the language of the Mining Law.

 

The Supreme Court’s action is not expected to have any meaningful effect. The deadline in the Mining Law of January 12, 2014, is still in place. The Government has yet to take action to modify this deadline. While the export ban does not apply to IUP holders, there are few if any IUP holders in production, except perhaps those Contract of Work holders that converted their Contracts of Work to IUPs.

 

Please note that previously the Supreme Court has dismantled several provisions of ESDM Reg 7 in two prior decisions ― No. 09 P/HUM/2012 and No. 10 P/HUM/2012, both on September 12, 2012 ― and miners were allowed to continue to export raw minerals as a result of those decisions.

 

SSEK

 

For further information, please contact:

 

Darrell R. Johnson, Soewito Suhardiman Eddymurthy Kardono

[email protected]

 

Dewi Savitri Reni, Soewito Suhardiman Eddymurthy Kardono

[email protected]


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