Terbit Rules! Freeport Can Extend Mining Permits To Reserves Out

Photo: Doc. Freeport Indonesia

JAKARTA - PT Freeport Indonesia can now extend its special mining business license (IUPK). This is in line with the issuance of Government Regulation (PP) Number 25 of 2024 which is an amendment to Government Regulation (PP) Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities. This rule was signed by President Joko Widodo on May 30, 2024.

In this regulation, Article 195 and Article 196 are included in two articles, namely Article 195A and Article 195B which regulates IUPK as Continuation of Contract/Parliament Operations.

Article 195B paragraph (1) states that the IUPK of production operations, which is a form change of Work Contract (KK) before the enactment of Law Number 3 of 2020 concerning Amendments to Law Number 4 of 2009 concerning Mineral and Coal Mining, can be given an extension after meeting the criteria for at least:

a. Have domestic integrated processing and/or purification facilities;

b. Have the availability of reserves to meet the operational needs of Processing and/or Purification facilities;

c. The shares have at least 51 percent (fifty-one percent) owned by Indonesian participants;

d. Has entered into an indeluble new share sale and purchase agreement of at least 10 percent (ten percent) of the total share ownership to BUMN;

e. considering efforts to increase state revenue;

f. Have the fewest new investment commitments in the form of advanced exploration activities and capacity building of purification facilities, which have been approved by the Minister.

Then in Article 2 it reads that an extension is given during the availability of reserves and an evaluation is carried out every 10 (ten) years.

"The application for an extension of the permit is submitted to the minister no later than 1 year before the end of the production operation period," the contents of article 3 of the regulation.

Whereas article 4 reads: Application for extension of the permit as referred to in paragraph (3), must be equipped with: a. application letter; b. map and boundary of regional coordinates; c. proof of payment of fixed contributions and production contributions 3 (three) last year; d. report on production operations up to applications for extension; e. report on the implementation of environmental management; f. RKAB; dang. balance of resources and reserves.

Article 5 states that the Minister has approved the application for an extension of the permit based on the results of the evaluation of the fulfillment of the criteria as referred to in paragraph (1) and the requirements as referred to in paragraph (4) as well as for the performance of the Production Operation, within the slowest period before the end of the permit.

"The minister can refuse an extension request based on the results of the evaluation of the fulfillment of the criteria as referred to in paragraph (1) and the requirements as referred to in paragraph (4) and on the performance of Production Operations," reads the contents of article 6.

Finally, article 7 reads "The rejection as referred to in paragraph (6) must be submitted to the permit holder no later than the end of the permit accompanied by reasons for rejection".

Previously, in PP number 96 of 2021, it was stated that the extension of the IUPK could only be carried out no later than 5 years or no later than 1 year before the validity period of the mining business license ended.