Responding to the BPK's Findings, the Ministry of Energy and Mineral Resources Recalculated the Amount of Fines For Delays in Smelter Construction

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) is following up on the findings and recommendations of the Supreme Audit Agency (BPK) regarding the ministry's financial reports for the 2022 fiscal year.

"The BPK's findings on state revenue from the seriousness guarantee of administration fines for delays in the construction of refining facilities have not yet been assessed and the Ministry of Energy and Mineral Resources has followed up on them but not in accordance with the recommendations," said the Minister of Energy and Mineral Resources, Arifin Tasrif in a Working Meeting with Commission VII of the House of Representatives (DPR RI), Thursday 31 August.

Arifin explained that if the BPK recommends the Minister of Energy and Mineral Resources to instruct the Director General of Mineral and Coal to determine and collect administrative fines from IUP holders who do not reach the percentage of physical progress in the construction of refining facilities according to the provisions and collect and place serious guarantees from IUP holders to be deposited in an account determined by Ministry of Energy and Mineral Resources.

"The Directorate General of Mineral and Coal has submitted letters of acceptance of seriousness guarantees to 12 business entities receiving metal mineral export recommendations," continued Arifin.

It is known, if the imposition of administrative fines for delays in refining facilities is 20% of the cumulative value of overseas sales for each period of delay taking into account the impact of the COVID-19 pandemic.

And for now, he continued, there are 3 business entities that have placed part of their seriousness guarantees and have not been paid off, and 9 business entities that have not placed serious guarantees.

"The Directorate General of Mineral and Coal will immediately issue warnings and sanctions to 12 business entities that have not placed and have not paid off their commitments," Arifin added.

The total obligation for placement of serious guarantees amounted to 506 million US dollars and was paid 56.9 million US dollars so that the remaining serious guarantees amounted to 449.6 million US dollars.

The 12 companies consist of copper, iron, zinc and bauxite commodities. Companies that are required to place such serious guarantees are PT Freeport Indonesia (PTFI), PT Amman Mineral Nusa Tenggara, PT Sebuku Iron Lateritic Ores, PT Kapuas Prima Coal, PT Quality Sukses Sejahtera, PT Dinamika Sejahtera Mandiri, PT Parenggean Makmur Sejahtera, PT Persada Pratama Cemerlang, PT Sumber Bumi Marau, PT Kalbar Bumi Perkasa, and PT Laman Mining.

Regarding late fines, Arifin said the Directorate General of Mineral and Coal is conducting a recalculation of late fines for 12 business entities that have received export recommendations by taking into account the Verification Report on Physical Progress Affected by Covid-19 by an independent verifier that has been submitted by the business entity.