Indonesia: Government consolidates permitting in the mining sector

The Indonesian Ministry of Energy and Mineral Resources (MEMR) has issued Regulation No. 34 of 2017, effective on 9 May 2017 (Regulation 34/2017), replacing various existing MEMR regulations in relation to permitting in the mining sector, including for mining services. It is intended to consolidate and simplify the process for permitting, previously contained in numerous MEMR regulations, and clarify the respective authorities of the MEMR and the relevant Governor in issuing permits. 

Regulation 34/2017 further reinforces the principle contained in Government Regulation No.1 of 2017 and the Regional Autonomy Law that regents (bupati) no longer have authority to issue permits in the mining sector. Mining permits will be issued by the Governor or the Minister in accordance with their respective authorities, and importantly, all permits issued in the framework of foreign investment (penanaman modal asing, PMA) will be issued by the Minister. Regulation 34/2017 regulates the granting of, and rights, obligations and restrictions for the holders of, mining business permits (Izin Usaha Pertambangan, “IUP”), special mining business permits (Izin Usaha Pertambangan Khusus, “IUPK”), special operating mining business permits for refining and processing (Izin Usaha Pertambangan Khusus untuk Pengolahan dan/atau Pemurnian, “IUP OPK”) and mining services permits (Izin Usaha Jasa Pertambangan, “IUJP”). The transitional provisions provide that existing permits awarded under the previous regulations are grandfathered, but must now comply with the requirements of Regulation 34/2017.

Read more