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INDONESIA – Government may revoke permits

Indonesia’s Ministry of Energy and Mineral Resources may revoke the Mining Business Permit (Izin Usaha Pertambangan, or IUP) of 4643 local mining companies at the end of January. The Ministry says these companies still lack the clean and clear certificate (CnC) from regional authorities.

The CnC certificate indicates that a mining company has no outstanding royalty and other tax debts, has fulfilled its exploration and environmental commitments, has no property delineation issues and has obtained the necessary forestry permits.

The Ministry’s general director of Coal and Minerals R Sukhyar warned that based on Law No 4/2009 regarding Mineral and Coal Mining, the government holds the power to revoke mining permits when miners do not comply with current rules.

The Ministry urged Indonesia’s regional governments to make serious efforts to provide the CnC certificate to local miners (after inspecting the companies’ corporate and financial details) before the end of the month.

Sukhyar added that the central government had begun to restructure the country’s IUP framework in 12 mining producing provinces since early 2014. These efforts also involved the participation of other institutions such as the Corruption Eradication Commission (Komisi Pemberantasan Korupsi or KPK) and the Tax Directorate General (Direktorat Jenderal Pajak or DJP). In 2014, a total of 275 IUPs were revoked.

At the end of 2014 there were a total of 10,643 IUP holders in Indonesia, of which 4643 still have not obtained the CnC certificate.

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