Regulation On IUP Adjustment and Registration of Changes of Shareholders, Bod And/or Boc For Mining Companies

In Mid-April 2022, the Government of Indonesia through the Ministry of Energy and Mineral Resources (“MEMR”) issued Decree of the Minister of Energy and Mineral Resources Number 78.K/MB.01/MEM.B/2022 of 2022 on Guidelines for the Implementation of Licensing Evaluation and Registration of Changes of Shareholders, Board of Directors and/or Board of Commissioners for the Mining Permit Issued by Governor or Regent/Major before the Enactment of Law Number 3 of 2020 (“Decree 78/2022”).

Decree 78/2022 provides guidelines for mining companies related to Mining Permit (Izin Usaha Pertambangan, “IUP”) and registration of change of shareholders, Board of Directors (“BoD”) and/or Board of Commissioners (“BoC”) of mining companies.

A. IUP Adjustment

For IUP issued by the Governor or Regent/Major before the enactment of Law Number 3 of 2020 regarding Coal and Mineral Mining (“Law 3/2020”), Decree 78/2020 provides:

procedures of and requirements for the evaluation of the application for upgrading the IUP from exploration stage to production operation stage; and
procedures of and requirements for the evaluation of application for extension of the IUP at the production operation stage,

For the IUP Adjustment, the application must be submitted to the MEMR no later than 11 June 2022. After the issuance of the IUP by the Minister of Energy and Mineral Resources of the Republic of Indonesia (“MEMR”), IUP holders within 6 (six) months shall:

submit revised feasibility documents to obtain approval from the MEMR if the feasibility documents have not been in accordance with the prevailing regulations;
provide resource and reserve balance data that has been verified by a competent person as long as there is a competent person in accordance with the provisions of prevailing laws and regulations for metal mineral commodities, non-metal minerals, and coal
deposit reclamation guarantee and post-mining guarantee if the reclamation guarantee and the post-mining guarantee that have been deposited have not been in accordance with the approval of the reclamation plan and post-mining plan.

The IUP holders are only allowed to carry out mining activities after obtaining approval for the feasibility study, and depositing the reclamation guarantee and post-mining guarantee. The IUP holders carrying out mining activities without first obtaining approval for the feasibility study, and depositing the reclamation guarantee and post-mining guarantee shall be subject to a sanction in the form of revocation of the IUP.

Please see below the requirements related to IUP Adjustment under Decree 78/2022:

Types of Requirements	Requirements
Types of Requirements	Upgrading the IUP	Extension of Production Operation IUP
Administrative	The application must be submitted before the date of the expiration of the IUP	The application must be submitted before the date of the expiration of the IUP
Administrative	Completing requirement documents for upgrading from the exploration stage to the production operation stage	Complete requirements= documents for extension of production operation IUP
Technical	Having a complete exploration report	Having reserves and resources balance
Technical	Having a feasibility study document that has been approved by the relevant Governor or Regent/Mayor
Environmental	Having environmental documents and environmental approvals issued by the relevant agency in accordance with the prevailing regulations	Depositing reclamation guarantee for production operation stage and post-mining guarantee
Financial	The deadrent (iuran tetap) has been fully paid until the current year	The deadrent (iuran tetap) and royalty (iuran produksi) have been fully paid until the current year

B. Registration of Changes of Shareholders, Board of Directors (“BoD”) and/or Board of Commissioners (“BoC”)

Related to registration of changes of shareholders, BoD and/or BOC, Decree 78/2020 provides:

procedures for the registration of changes of shareholders, BoD and/or BOC of the holders of mining permits e.g., Contract of Work (“CoW”), Coal Contract of Work (“CCoW”), IUP and Special Mining Permit (Izin Usaha Pertambangan Khusus, “IUPK”); and
procedures for the registration of changes of shareholders, BoD and/or BOC of the IUP holders that have not obtained approval from the Governor.

Since the issuance of Decree 78/2022, the registration of changes of shareholders, BoD and/or BoC must be carried out through Minerba One Data Indonesia (“MODI”) application. Meanwhile, the IUP holders that have not obtained approval from the Governor related to the changes of shareholders, BoD and/or BoC before 10 December 2022 can submit the application for the registration through MODI application no later than 11 June 2022. The IUP holders before registering the changes of shareholders, BoD and/or BoC in MODI application shall be subject to the administrative sanction pursuant to the prevailing regulations e.g., warning letter, suspension of the mining activities and/or revocation permit.

The following are requirements for the registration of changes of shareholders, BoD and/or BOC in MODI application under Decree 78/2020:

Required Documents for the Registration of Changes of Shareholders

No.	Requirements
1	Letter of assignment on the registration of changes of shareholders signed by the BoD
2	Approval letter for the changes of shareholders issued by the MEMR or relevant governor in accordance with their authorities.
3	For the Approval issued by the MEMR, the applicant must attach the latest deed containing shareholder structure including the legalization from the Minister of Law and Human Rights (“MoLHR”).
4	For the Approval issued by the Governor, the applicant must attach: a. copy of the deed of establishment and its all amendments including the legalization from the MoLHR; b. copy of the deed being the basis of the changes of shareholders, BoD and BoC, including the following documents: (1) copy of the Resolution of the General Meeting of Shareholders (“GMS”) being the basis of the issuance of a deed; (2) copy of power of attorney (if any) (3) beneficial ownership structure

Required Documents for the Registration of Changes of the BoD and BoC

No.

Requirements

Letter of assignment on the registration of changes of the BoD and BoC signed by the BoD

Copy of the deed regarding changes in the BoD and BoC structure and its legalization from the MoLHR, including the following documents:

a. copy of the Resolution of he General Meeting of Shareholders (“GMS”) being the basis of the issuance of the deed signed by the registered shareholders in the database of the Directorate General of Mineral and Coal (“DGMC”);

b. copy of power of attorney (if any); and

c. Taxpayer Identification Number (“NPWP”).

Required Documents for the Registration of Changes of the BoD and BoC that Have Not Obtained Approval from the Governor

No.	Requirements
1	Letter of assignment on the registration of changes of shareholders signed by the BoD
2	Copy of IUP and its all amendments
3	copy of the deed of establishment and its all amendments including the legalization from the MoLHR
4	copy of the deed being the basis of the change of shareholders, BoD and BoC, including the following documents: (1) copy of the Resolution of the General Meeting of Shareholders (“GMS”) being the basis of the issuance of the deed; (2) copy of power of attorney (if any); (3) beneficial ownership structure; (4) NPWP; (5) no outstanding payment for deadrent and royalty.

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