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Mining Downstream Policy in Indonesia

Indonesia is blessed with an abundance of natural resources in the form of mineral commodities such as copper, tin, nickel, bauxite, iron, etc. To maximize the state's revenue, business actors are allowed to export these commodities and the Indonesian Government, through regulation in Indonesia, has consented to a downstream mining policy. This policy prohibits the export of such raw materials. With this prohibition, investment is expected to increase to help develop the processing and refining industry for Indonesian mining products, creating jobs. The export ban is imposed on certain unrefined mineral commodities.

Article 170A (1) Law No. 3 of 2020 of the law in Indonesia with Amendment of Law No. 4 of 2009 (“Law 3/2020”) on Mineral and Coal Mining specifies a period until 10th June 2023 allowing the holder of Kontrak Karya/KK (Work Contract), Izin Usaha Pertambangan Operasi Produksi/IUP Operasi Produksi (Mining Business License for Production Operation) or Izin Usaha Pertambangan Khusus Operasi Produksi/IUPK Operasi Produksi (Special Mining Business License for Production Operation) to export unrefined minerals with the following requirements:

  1. The processing and refining activities have been carried out;
  2. The processing and/or refining facilities are under construction; and/or
  3. The holder has entered into processing and/or refining cooperation with holders of a Mining Business License for Production Operation, Special Mining Business License for Production Operation or Mining Business License for Production Operation specifically for processing and refining, or other parties carrying out processing and/or refining activities.

The implementation of the regulation on mineral export provision is stipulated in Minister of Energy and Mineral Resources Regulation No. 17 of 2020 on the Third Amendment of Minister of Energy and Mineral Resources Regulation No. 25 of 2018 on Mineral and Coal Mining Business (“MoEMR 17/2020”). If you, a prospective client, have further inquiries regarding the topic explained above, Schinder Law Firm is one of many corporate law firms in Indonesia that has extensive experience in similar matters, with many experienced and professional civil lawyers and dispute lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author: Dewi Susanti

Schinder Consultant London Ltd.


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