Friday , August 17 2018

Requirements and Licensing

Requirements and Licensing Smelter Contruction

A. The New Company will build a smelter

In this case, we assume that this new company is a company that does not have a Production Operation Mining Business License (“IUP OP”), but the company wants to build a smelter because he wanted to have a business in the field of processing and refining of mining products.

The company may build a smelter by first having Mining Permit Special Production Operation Processing and Refining (“IUP OPK Processing and Refining”). Things to do these companies to obtain IUP OPK Processing and Refining is:

  1. Attach a letter of request submission IUP OPK Processing and Refining;
  2. Complete information on the submission form IUP OPK Processing and Refining; and
  3. Completing the application document submission checklist IUP OPK Processing and Purification.

Meanwhile, the documents must be attached and permits that must be held in the Request for IUP OPK Mineral Processing and Refining is:

  1. Company Profile by stating:
    • Deed of Company Establishment and Amendment
      • Mining and Trade (processing of mineral commodities intended)
      • The composition of the Board of Directors of the Company
      • Shareholders
    • Taxpayer Identification Number (TIN)
    • License
    • Certificate Of Domicile
    • Certificate Of Company Registration
    • Ratification Deed of Establishment of the Authority
  2. Memorandum of Understanding (“MoU”) / Purchase Agreement Between Applicant Special Production Operation IUP Production Operation IUP Holder are still valid, with the data:
    • Specifications Minerals
    • Volume (tonnage)
    • Period MOU / Agreement
    • Stamped Enough
  3. MoU / Purchase Agreement / Purchase Order Between Applicant Special Production Operation IUP with Buyer (End User) is still valid, with the data:
    • Specifications Minerals
    • Volume (tonnage)
    • Sales objectives
    • Period MoU / Agreement
  4. Legality SK Production IUP Production Operation IUP that has been registered in the Directorate General of Mineral and Coal / Clean and Clear (CNC) attached.
  5. Technical Data Mine Owners / Production Operation IUP (Reserves / Resources – Production Capacity) – Letter of Approval of EIA or FS / Feasibility Study
  6. Financial Reports Company Production Operation IUP
    • Contribution Payment Receipt still three (3) years
    • Proof of payment of royalties of 3 (three) years
  7. Licensing Industry / Licensing establishment factory
  8. Financial Statements of the Company 3 Years
  9. RKAB report last year (legalized of the local Mining Office)
  10. Approval of EIA or UKL and UPL
  11. Approval of FS / Feasibility Study Factory issued by local officials
  12. List of Experts

The provisions concerning the articles of association for companies who want to get IUP OPK Processing and Refining

Based on the Circular of the Ministry of Energy and Mineral Resources of the Republic of Indonesia Number: 11.E / 30 / DJB / 2011, in Point D explained that the entities that will get IUP Production Operation specifically for processing and refining to be included in the deed of establishment engaged in the mining business, especially in the field of processing and refining of minerals and / or coal and can be combined with the industrial sector, trade, transportation, energy, and capital investment.

B. The mining company has been established

In this case, we assume that a mine that has been established this is a company that already has a Production Operation Mining Business License (“IUP OP”) and the company wanted to build a smelter to process and purification of the mine production results.

In contrast to companies that do not have the IUP OP, the companies that own IUP OP does not need to get IUP OPK Processing and Refining first. This is because processing and refining is an activity which is included in the scope of IUP OP. It is based on Article 34 paragraph (3) of Government Regulation No. 23 Year 2010 on the Implementation of Mineral and Coal Mining Business which states:

“Production Operation IUP activities include construction, mining, processing and refining, transportation and sales”

It is supported by Article 1 paragraph 18 of Law No. 4 of 2009 on Mineral and Coal Mining which states:

“Construction is the mining business activities to undertake the construction of the entire facility production operations, including environmental impact control”

Therefore, these companies no longer need to apply for IUP OPK purification and processing. Nevertheless, the company still had to take care of the Licensing Industry / Licensing Factory establishment regulated by the Ministry of Industry and local government in the area of ​​the smelter is planned to be built. This is because smelters considered as a factory.

C. Other Things to Note

We can say that basically the Ministry of Energy and Mineral Resources (“MEMR”) does not have an official standard in pembangungan Smelter project. However, based on our verbal confirmation to the Ministry of Energy, there are certain things that become the focus and the main criterion in assessing the feasibility of a development plan Smelter. Things are as follows:

  1. Fund. Fund or the value of the investment is the main focus in the development of Smelter. Smelter construction is a project that requires huge funds. Based on some of the literature that we get, many existing smelter in Indonesia has an investment value of more than Rp 1 trillion.
  2. Power supply / Power Plant. This power supply must be considered as smelters require huge power supply. Therefore it is usually the most value from the investment of the smelter project will be allocated for the construction of the Power Plant to supply the electricity needs of the smelter. Regarding the electricity supply should also pay attention to the provisions of Government Regulation No. 14 Year 2012 on Electricity Supply Business Activity.
  3. Availability of Raw Materials. It has also become very important because lest when Smelter already built but the raw materials to be processed commodities halted the supply so it can not harm the operating and smelter owners.

Legal Basis:

  1. Law No. 4 of 2009 on Mineral and Coal Mining
  2. Government Regulation No. 23 Year 2010 on the Implementation of Mineral and Coal Mining Business
  3. Government Regulation No. 14 Year 2012 on Electricity Supply Business Activity
  4. Circular of the Ministry of Energy and Mineral Resources of the Republic of Indonesia Number: 11.E / 30 / DJB / 2011 of 2011 on classification Enterprises in Mining in the Deed of Establishment of Enterprises.