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Mining Licenses Revocation in the First Semester of 2022 in Indonesia

President Joko Widodo announced the revocation of 2.078 mineral and coal Mining Business Permits (Izin Usaha Pertambangan/IUP) because the IUP holders never submitted their work plans (Rencana Kerja dan Anggaran Biaya/RKAB) even though the permits had been granted for years. Minister of Investment/Head of the Investment Coordinating Board Bahlil Lahadalia stated that the revocation of IUPs for 2.078 mining companies in Indonesia was carried out starting January 2022, following Presidential Decree No. 1 of 2022 concerning the Task Force for Land Use Management and Investment Management (Satuan Tugas Penataan Penggunaan Lahan dan Penataan Investasi) as applicable regulation in Indonesia. The government will transfer the revoked licenses to entrepreneurs who have the capability and integrity as well as sufficient capital to manage the IUP, including Regional Owned Enterprises, community organizations/groups, Small and Medium Enterprises, and cooperatives in the region, providing an investment opportunity in Indonesia. Furthermore, in accordance with Mining Law and related laws in Indonesia, an IUP or Special Mining Business Permits (Izin Usaha Pertambangan Khusus/IUPK) can be revoked by the Ministry of Energy and Mineral Resources if the IUP or IUPK holders:
  1. do not fulfil the obligations stipulated in the IUP or IUPK as well as the provisions of the law and regulations;
  2. commit a crime as defined in Mining Law; or
  3. declared bankruptcy.
If an IUP or IUPK expires, the former IUP or IUPK holder shall fulfil and settle obligations under the provisions of law and regulations. IUP or IUPK holders who have fulfilled and completed these obligations will receive a certificate/statement from the Minister. The Minister of Energy and Mineral Resources has the right to give administrative sanctions (one of which is revocation) to holders of IUP, IUPK for violating the provisions in Article 151 Mining Law and Government Regulations No. 96 of 2021 to criminal sanctions, which can revoke IUPs without going through the written warning, temporary suspension and license revocation procedures as set out in Articles 158, 159, 160, and 161A of the Mining Law. Schinder Law Firm as one of biggest corporate law firms in Indonesia and has years of experience in the mining industry and investment law in Indonesia, especially in relation to the business license. Should you wish to carry out any of the activities discussed, feel free to drop us an email at info@schinderlawfirm.com.

Author: Dewi Susanti

Schinder Consultant London Ltd.


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