Law No. 4/2009 on Mineral and Coal Mining

Article 4 d. setting a system of licensing national mineral and (1) Mineral andcoal as non-renewable naturalresources coal mining; constitute national wealth controlled by the state for e. setting WP aftercoordinating with regional govern- the greatest benefitof the people's welfare. ments andconsulting the House of Representatives (2) The control of mineral and coal by the state as re- of the Republic of Indonesia; terrell lu ill pdrdyrdph (1) :;hclll be realiLed by the Gov- f. issuing LUI"} nurturing, settling public conflicts and ernment and/orregional governments. controlling mining businesses located in morethan 1 (one) provinces and/or waters more than 12 Artide 5 (twelve) milesfrom the coastlinei (1) In the national interests, the Government, after con- g. issuing IUP, nurturing, settlingpublicconflicts, and sulting the House of Representatives of the Republic of controlling mining businesses located in morethan Indonesia, can set a mineral and/or coal policy which 1 (one) provinces and/or waters more than 12 gives a priorityto the domestic interests. (twelve) milesfrom the coastline; (2) The natlonel interests as referred to in paraqraph (1) h. issuing IUP, nurturlnq, settlina puhllc conflirtc:, - can be realized throughthe control of production and and controlling production operation mining exports. businesses which have a direct environmental (3) In conducting the control as referred to in para- impact on more than 1 (one) provinces and/or graph (2), the Government has th~ authority to set waters more than 12 (twelve) miles from the the annual production of each commodity for each coastline; province. i, issuing IUPK for exploration and IUPK for opera- (4) Regional governments shall complywith the Govern- tionaI production; ment-set production as referred to in paragraph (3). j. F'V<"luating IUP for operational production issued by (5) Further provisions onthe mineral and/coel policy Which regional governments, which have caused environ- gives a priority to the domestic interests asreferred to mental damage and do not apply good mining as- in paragraph (1) andthe control of production andex- pects; ports as referred to in paragraph (2) and paragraph k. setting production, marketing, usage and conser- (3) are to be provlded for in a government regulation. vation policies; I. setting poJides oncocperatlon, partnership and em- CHAPTER IV powerment of the community: THEAUTHORITY TO MANAGE MINERAL m. formulating andsettingnon-taxstate receipts from AND COAL MINING mineral andcoalminingbusinesses;

Article 6 n. nurturing andcontrolling the management of min- (1) The Government's authority in the management of t::lal and cool mining by regional governmentsj mineral and coal mining covers: o. nurturing andcontrolling the enactment of bylaws a. setting national policies; in the miningfield; Business News 7770/2-6-2009 p. making . p. making Inventory, inspection, and research as well e. making inventory, inspection and research as :asexploration to get data and information on min- well as exploration to get data and lnformatlcn erai andcoalasmateriaJs to makeWUP andWPNi on mineral and coal in accordance with its au- q. managing information on ge>Iogica! O)OCifOOns, in- thority; tormation on mineral andcoal resource potentials, f. managing information on geological conditions, in- andinformation on mining at a national level; formation on mineral and coalresource potentials r. nurturing andcontrolling the reclamation of post- as well as information on mining In the province; mining areas; g. drawing up a balanre sheet of minerai and coal s, drawing up a balance sheet of mineral and coal resources in the province; resources at a national ~; h. ~ping and improving the ackkKJ value of min- to developing and improving the added value of min- ing business activities in the province; ingbusiness actMties;and i. develOping and Improving a public role In mining u, improving the L:apaclty or apparatuses or the GOV- busmesses by observing environmental mnserva- ernment, provincial governments, and regen<.y! lion efforts; munidpal governments in themanagementof min- j. coordinating the issuance of permits and control- ing businesses. \ing the useof explosives \n mmmg areas In eccer- (2.) The Government's authority as referred to Inparagraph dance with its authority; (1)shall be realized inaccordance with the legislation. k. sllhmittino information on the results of inventory, general inspection and research and exploration to Artide 7 the Minisb:!r and regents/mayors; (1) The provincitlol government's auUloriLy In tne rnanaqe- I. submlUlng InformatIOn on the resultsofproductioo, ment of mineral andcoalmining covers: domesticsales and exports to the Minister andre- a. enacting bylaws; gents/mayol'$; b. issUng !UP, nurturing, settling publicconftids and con- m. nurturlng and controlling the reclamation of post- troIIiIYiI mi~.~ Il:Iai8j inrrae than 1(one) mining areas; and regendesfmunidpalities andlorwaters 4(four) mle; n. improving t:il@ capacity d apparatuses of provincial upto 12(twelve) miles from the ooastllne; govemmentand regency/munldpal governments in c. issuing IUP, nurturll'lg, settlmg public conflicts and fue ITIanagement of mining businesses. conb\7lling producliQn operation mining busll~ (2) TIre pruviflCicj' govemmenrs aumonty as re!'e1Te(j to in located inmore than 1 (one) regendes/munidpali- paragraph (1) shall berealized in aocordance withthe tiesand/orwaters 4 (four) up to 12(twelve) miles legislation. fromthe coastline; d. issuing Iup,nurturing, settling public conflicts and Artide 8 controlling mining businesses which have a direct (1) The regency)municivalgovemment'sauthority in the environmental impact on more than 1 (one) regen- management of mineral and coa« mining businesses cies/municipalities and/or the waters 4(four)miles shall cover: up to 12 (twelve) miles from the coastline; e, enocting bylllWSj Business News 7770/2-·6-2009 Lissuing ..... 6A b. issuing IUP and IPR, nurturing, settling public con- (2) Theregency/municipal government's authorityas re- flicts:, and controlling mining busines!»e$loc:ated In ferred to in paragraph (I) shall be realized in accor- the regency/municipality and/or waters up to 4 (four) dance with the legislation. miles from the coastline; c. iSSUing IUP and IPR, nurturing, settling pun- OiAPTERV !.ic conflicts and controlling production op- MININGAPEAS eration mining businesses whose actiVities Part One are found in the regency/municipality and/ General or waters up to 4 (four) miles from the Artide9 coastline; (1) WP as part of the national spatial Iavout serves as the d maldng inventory, Inspection and researchas well basis to set miningactMtles. as exploration to get data and information on min- (2) WP as referred to in paragraph (1) shall be erai and ooal; set by the Government after coordinating with e. managing infonnation on geological conditions, the regional government and conSUlting the information on mineral and coal potentials as House of Representatives of the Republic of wen as information on mining in the regency} Indonesia. munidpality; f. drawing uP a balance sheet of minefal and coal Article 10 resources In theregency/municipality; The effort to set WP as referred to in Artide 9 g. developing and empowering the local community paragraph (2) shall be made : in mining businesses by observing environmental a. In a transparent, partkipative and responsible way; conservation efforts; b. in an (ntegrated way by observing views from rel- h. devefoping and improving the added value and ben- evant government agencies,and the public as well efit cA mining business actiVities to the optimum as by taking into account ecological,economic and level; socio-cultural as well as envlronment-orlented as- t, submitting information on the results of invenlDryf pectsi and general inspectfon, and research as well as explo- c. by observing regional aspirations. ration and expJoitation to the Minister and gover- 1101; ArtIcle 11 j. submittinginfOrmation ontheresults of produd:ioJl, The Government and regional governments shall domestic sales and exports to the Minister and geN- oondud: a mining inspection and researdl as part rJ prepa- emor; rations for WP. k. nurturing and controUing the reclamatiOn of post- Article 12 mining areas;and Further provisions on the border, areaand mecha- I. improving the capactty of apparatuses of the re- rssm to set WP as referred to in Article 9, Artide 10 and gency/municipal government in the management ArtIcle 11 are to be provided for in a government regula- of mining businesses. tion. Business News mO/2-fr2009 Article 13. ~ ... 7A

Article 13 a. geographical location; WP consists of : b. conservation aspects; a. WUPi c. the supporting power of environmentel protection; b. WPR; and d. the optimum useof mineraland/or coal resources; and c. WPN. e. population density rate. PartTw Artide 19 Mining Business Areas FIJrther provisions on thQ procedure to set the

Article 14 borderand area ofWIUPs as referred to ln Article 17 are (1) The effort to set WUP shall be made by the Govern- to be provlded for in a government regulation. ment lifter coordinoting with the regionol government andnotified Inwriting to the House of Representatives PartThree of the Republic of Indonesia. Smallholder MiningArea (2) Thecoordination as referredto in paragraph (1) shall

Article 20 be dane with the-relevant regional government based. Smallholder mining activities shall becarried out on data and information owned by the Government in a WPR. and the regional government. Article 21

Article 15 WPR as referred to in Article 20 shall be set bythe The Government candelegate part of its authority regent/mayor after consulting the Regional Legislative Asw to set WUP as referred to in Article 14 paragraph (1) to the sembly of the regencyjmun.icipality concerned. proyindal government in accordance with the legislation.

Article 22

Article 16 The criteria of setting WPR are as follows: One WUP consists of 1 (one) or several WlUPs a. holding secondary mineral deposits found in the river located in morethan 1 (one) provinces, regencies/munici- palities, and/or in 1 (one) regency/municipality. and/or between the side and the riverbank; b. holding primary metal or coal deposits at a maximum

Article 17 depth of 25 (twenty-five) meters; The area and border of WIUP for metal mineral c. terrace eendtment, flood plaill, and ancient rivel and coal shall be set by the Government in coordination sendirnent; with the regional government based on the criteriaowned d. the maximum area of WPR is 25 (twenty-five) hect- by the government. ares; e. mentioning the type of commodity to be mined;and/or .~rtide 1B f. being an area or place of smallholder mining The criteria of setting 1 (one) or several WIUPs activities carried out for at least 15 (fifteen) within 1 (one) WUP shall be as follows : years. Business News 7770!2~6-2009 Article 23 ..... BA

Article 23 (4) The areas which are to be earmarked for the pur- In setting WPR as referred to in Article 21, the poses as referred to in paragraph (2) and paragraph regent/mayor shall announce the WPR plantothe public in (3) shallhavetheir status changed into WUPK. a transparentway. Artide 28

Article 24 The change in the status of WPN as referredto in The area or place of smallholder miningactivities Artide 27 paragraph (2), paragraph (3) andparagraph (4) that haw'! been carried out but nave not beQn set as wPR into WUPKcan be made bytakill9 into account: shall receive priority in the effort to set WPR. a. the fulfillment of domesticneedfor industrial raw ma- terials andenergy; Artlcle 2.5 11. the state source or run:::lgn exchange earnings; Further provisions on the gUidance and procedure c. the regional conditions based on limitedinfrastructures to set WPR as referred to in Article 21 and Artide 22 are to andfacilities; be provided for in a governmentregulation. d. haVing the potential to develop intoaneconomic growth center;

Article 26 e. the supporting capacityof the environment; and/or Furtherprovisions on the criteria and mechanism f. the useof hightechnologyand huge investment. to setWPR as referred to in Article22 and Article23 are to be provided for in the regional regulations of the regency! Article 29 municipality. (1) WUPK as referred to in Article 27 paragraph (4) PartFbur which is to be developed shall be set by the Gov- Stole Reserve Are.:! ernment after coordiol:Jting with the regiona' gov-

Article 27 ernment. (1) In the interests ofthe national strategies, the Govern- (2) The mining business activities in WUPK as referredto ment, bythe approval of the House of Representatives in paragraph (1) shan come in the form ofIUPK. of the Republic of Indonesia and by observing regional aspirations, shall set WPN as an-area reserved for cer- Article 30 tain commodities and conservation area within the One WUPK consists of 1 (one) or several frame of keeping the balance of the ecosystem and WIUPKs located in more than 1 (one) provinces, re- environment. gencies/municipalities and/or in 1 (one) reqencv/mu- (2) Partof the area of WPN reserved for certaincommodi- nicipality. ties as referred to in paragraph (1) can be madeready by the approval of the House of Representative:> of the Republic of Indonesia. Article 31 (3) The time limit to set WPN as conservation area as re- The area and border of WIUPK for metal mineral Ferred to in paragraph (1) can be decided by the ap- and coal shall be set by the Government m cooromanon proval of the House of Representatives of the Republic with regional governments based on the criteriaand infor- ofIndonesia. mation owned by the Government Business News 7770/2-6-2009 Article 32 ..... 9A

Article 32 OW'TERVII Thecriteria to set 1 (one) or several WIUPKs in 1 (one) MINING BUSINESS PERMITS WUPK areasfollOWS: part One a. geographical location; General b. consecvation aspects; Artide36 c, the supporting capacity ofenvironment protection; (1) IUPshall consist of two phases: d. the optimum use of mineral and/or coal resources; a. IUPfor explorat:ion covering genemI inspection, ex- and ploration andfeasibility study; e. population<lensiti rate. b. IUPfor operational productioncovering construc- tion, mining, processing and purification as well as ArtlcIe 33 transpnrtation and SilI~. FuIther pmv1500s on the pnxedureto setthe area (2) Theholder of IUPfor exploration andthe holder of IUP and border of WIUPK as referred to in Artlde 31 and Ar- for operational production can carty aut part or whole ticle 32 are to be provided for in a government regulation. of the activities as referred lu in pctrtlgraph (1). aw:rrER.Vl Artide37 MINING BUSINESSES lUP shall be issued by :

Article 34 a. regent/mayor ifWIUP is located in a i'egenc.y/munici- (1) Mining businesses shall be dassified into: pality; a. mlnerm mining; end b. governor jf WIUP is located in more than 1 (one) re- b. coal mining. gencies/municipalities In 1 (one) province afterrecejy- (2) The mineral mining as referred to in paragraph (1) ing rAmmmendatinl1S frnm th.f> relevant regenWmay- lettera shall beclassified into: ors in accordance with the legislation; and a. radioactive mineral mining; c. the Minister if WIUP is located in more than 1 (one) b. ferrous mineral mining; provinces ,,/"ler rea::ivJllg recommendations from the c. non-ferrous mineral mining;and relevant governors and regents/mayors Inaccordance d. rock mining. with the legislation. (3) Funher prtMsions on the cIassiflcation ofa miningcorn- mocHty into a mineral mining group as referred to in ArtfCle38 paragraph (2) are to be provided for Ina government IUP shall be issued to: regulation. a. corporate bodies; b. cooperatIVes; and Artide35 c. individuals. Themining businesses as referred to in Article 34 shall corne in the form of : Article 39 Q• .Il.F; el) IUP for exploreltion es referred to in Artide 36 para- b. IPR; and graph (1) letter a shall at least contain the following c. IlPK. information: Business News n70/2.f>-2009 a, name, •.••• iDA a. name of company; r. occupational safety andhealth; b. location andsize of area; s. mineral or coal conservation; c. general spatial layout plan; t. use of domestic good!';" services and t~hnology; d. statement of readiness; u. application of good economic andmining technical e. investment capital; principles; f. extended phases Of activities; V. development of Indoneslan workers, g. rights andobligations oflUP holder; w. management of dataon minerai or coal; and h. validity period of phases of activities; x. control, development and application of mineral or i. type of licensed business; coal mining technology. j. plan for the development andempowerment ofthe community near thp mining area; Article 40 k. taxaticin; (1) IUPas referred to in Artide 36 paragraph (1) shall be I. settlement of conflict; issued to 1 (one) type of mineral or mal. rn. regular rees andexploration fees; anti (2) The holder of IU P cs referred to in pa ragraph n, amda!. (1) that finds other mineral in WIUP it manages (2) IUPfor operational production asreferred to in Article shall receive priority to manage the other min- 36paragraph (1) letter b shall at leastcontain the fol- eraI. lOWing information: (3) The holder afIUP that intends to manage the other a. nameofrompany; mineral as referred to in paragraph (2) shall file b. size of area; an application for a new IUP to the Minister, gov- c. mining site; ernor and regent/mayor according to their respec- d. processmq and purlflcatiun site; tive authority. e. transportation and sales; (4) The holderof lUP asreferred to in paragraph (2) can f. investment capital; state its intention not to manage the other mineral it g. validity period of IUP; has found. h. period of phases of activities; (5) The holder of IUPthat does not intend to manage the i- c;ettlement af land problems; othermineral it hasfound as referred to in paragraph j. environment including reclamation and post-mining; (4) shall keep the othermineral sothatother party will k. guarantee funds for reclamation and post-mining; not benefitfrom it. I. extension of IUPi (6) IUP for the other mineral as referred tn in paragraph m. rights andobligations oflUP holder; (4) and paragraph (5) can be granted to other party n. plan for thedevelopment and empowerment of the by the Minister, governor andregent/mayor according community nearthe mining area; to theirrespective: authonty. o, taxation; p. non-tax state revenues consisting of regular fees Article 41 and production fees; !Up cannot be used for purposes otherthanthose q, settlement of disputes; referred to in IUP. BusinesS NaYS 7770/2--6-2009 PartTwo . ! •• , itA PartlWo (2) IUPfor operational production can be issued to corpo- IUP for exploration rate txxIies, cooperatives or individuals through the

Article 42 auction of WIUP for metal mineral ,or coal if they have (1) lUP for exploration in ferrous mineral mining can be data on the reslJlts of a feasibility study. issued for a mmdmurn period of 8 (eight) years. (2) WP For expkxation In non-ferroI.ts minerai mining can Attide47 be isSUed for a maximum periOd of 3 (three) years (1) IUPfor operational production Inmetalmineral mining and non-ferrous mineral of certain type for a maxi- can be issued tor a maximum period of 20 {twenty} mum period of 7 (seven) years. years and can be twice extended tor 10 (ten) years (3) lUP for exploration in fOCk miningcan be issued for a @Ch. maximum period of 3 (three) years. (2) IUP for operational production in non-metal mineral (4) IUPfor exploration In coalminingcan be issued for a mining can be issued for a maximum period of 10 (len) maximum period of7 (se\I@n) yean>. yeaI'!> and can be twice ~ for ~ (fIVe) years each.

Article 43 (3) lUP for operational production in the mining of non- (1) In the event Of exploration and feaSibility studY. the metal mineral Ofcertaintype can be ssuedfor a maXi- holderof IUP for exploration that getsquarried min- mum period 0120 (twenty) years and can be twice eraior coalshall report them to the IUPissuer. extended for 10 (ten) yearseach. (2) The holder of IUP for exploration that intends to sell (4) IUP for operational production in rock mining can be the minerai or coal as referred to in paragraph (1) issued for a maximum period of5 (five) years and can shall apply fur a preliminary permit for transporbttion be.twice e'lCte.l'\ded fur 5 (five) years each. and sales. (5) IUP for operational production in coal mining can be tssued for a maximum period of 20 (twenty) Altide+:t years and can be twice estendedtor 10 (ten) year~ The preliminary pennI as referred to in Artide 43 each. paragraph (2) shall be issUed by the MinISter, governor, or regent/mayor according to theirrespective authortty. Article48 !Up for operational production shall be Issued Artlde45 bv: The quarried mineral or coalas referred to in Ar- a. the regent/mayor When mining site, processing and ticle 43 shall be subject to production fees. purification site and port are located in one regency} part11lree munidpdfilYi IUP for Operational Production b. the governorwhen mining site, processing andpurifi-

ArtX:Ie 46 cation siteand port are located in different regendes! (1) Any holder of IUP for exploration isguaranteed to ob- municipalities after receiving recommendations from tainIUP for operational productiOn asthecontinuatiof'l the relevant regents/mayors in accordance with the of their mining bl~_ legislation;and Business News 7770/2-6-2009 c. the ..... 12A c. the Minister when mining site, processing andpuntl- Article 53 cationsiteand port are located in different provinces Every holderof IUPfor operational production of after receiving recommendations from the relevant metal mineral shall be grantoo WIUP covering a maximum governors and regents/mayors in accordance with the areaof 25,000 (twenty·flVethousand) hectares. legislation. paragraph :3 Artide49 Non·Metal Mineral Mining Further provisions 00 the procedures of issuing Artide 54 IUPfor exploration "as referred to in Article 42 andIUPfor WIUP for non-metal mineral shall be granted to operational production as referred to in Article 46 are to corporate bodies, cooperatives and indMduals byapplying be provided for in a government regulation. for areas to the issuer of permit as referred to in Article 37. PartFour M;rlt'ri,l Mi,uug Artide 55 Paragraph 1 (1) Every holderof IUP for exploration of non-metal min- Radioactive Mineral Mining eraIshall be granted WIUP covering a minimum area

Article 50 of 500 (five hundred) hectares and a maximum area WUP for radioactive mineral shall be set by the of 25,000 (twenty-fivethousand) hectares. Government and its realization shalf bebased on the legis· (2) In the area to which lUP for exploration of non-metal lanon. mineral has been issued IUP can be issued to other party to manage other mineral found in different Paragraph 2 ploces. Metal Mineral Mining (3) IUP as referred to in paragraph (2) is issued after

Article 51 taking Into account views from the first holder of WIUP for metal mineralshall be issued to corpo- IUP. rate bodes, cooperatives and IndMduals through auctions.

Article 52 Article 56 (1) Every holder of IUP for exploration of metal mineral Every holderof IUPfor operational production of shall be granted W!UP covering a minimum area of non-mete' mineral shall be grantedWIUP covering a maxi- 5,000 (five thousond) hectares lind a maximum eree mum orea of 5,000 (fIVethousand} hectares. of 100,000 (one hundred thousand) hectares. (2) In the area to which IUP for exploration of metal Paragraph 4 minerai has been issued!Up can be issued to other Rock Mining party to manage other mineral found in different Artide57 places. WIUP for rock shall be grantedto corporate bod- (3) lUP as referred to in paragraph (2) is issued after tak· les, cooperatives and indiViduals by applying for areas to ing into account viewsfrom the first holderof IUP. the issuer of permit as referred to in Artide 37. Business News 7770/2-6·2009 ArtideSB......... 13A

Article 58 coal shall be granted WIUPcovering a maximum areaof (1) Every holder of !UP for exploration of rock shall be 15,000 (fifteen thousand) hectares. glClllted WIUP coverinq d minimum cued of 5 (rrve) hectares and a maximum area of 5,000 (five tnou- Artide 63 sand) hectares. Further provisions on the procedures of applyinJ for (2) In the area to which IUP for exploration of rock WIUP as referred to in Artide 51, ArtiCle 54, Artide 57 and has been issued IUP can be issued to other party Article-GO are to beprovided for ina government regulation. to manage other mineral found in different places. OiAPTER VIII (3) !Up as referred to in paragraph (2) can be issued THE REQUIREMENTS OFMINING BUSINESS PERMITS after taking into account views from the first holder Article 64 The Government and regional governments ac- ofIUP. cording to their respective authority shall transparently make public the plan to carry out minlng business activities Alticle 59 in WIUP as referred to in Article 16 as well as to issue !UP Every holderof !UPfor operational production of for explorationand IUP for operational production as re- rock shall be granted WlUPcovering a maximumarea of ferred to In Articte 36. 1,000(onethousand) hectares. PartFive

Article 65 Coal Minjng (l) COrporate bodies, cooperatives and indiViduals as re-

Article 60 ferred to in Article 51, Article 54, Article 57, andArticle WIUP for coal shall be granted to corporate bod- 60 that are engaged in mining businesses shall meet ies, cooperatives andindividuals though auctions. administrative, technical, environmental andfinancial requirements.

Article 61 (2) Further provisions nn adminio::.trativp, t~hni("i'll, envl- (1) Every holder of !UP for exploration of coal shall be mnmentaland finandal requirements asreferred to in grantedWIUP covering a minimumarea of 5,000 (five paragraph (1) are to be provided fur in agovernment thousand) hectares and a maximum area of 50,000 reguklUull. (fifty thousand) hectares. (2) In the area to which IUP tor exploration of coal has CHAPTER IX beenissued IUP can be issued to other party to man- SMALlHOLDER MINING PERMITS age other mineralfound in different places. Article 66 (3) !Up as referred to in paragraph (2) shall be issued Smallholder miningactivitiesas referred to in Ar- after taking into account viewsfrom the first holderof ticle 20 shall be classified into : IUP. a. metal mineral mining; b. nnn-metal mineral mining;

Article 62 c. rockmining; and/or Every holder of lUP for operational production of d. coal mining. Business News 7770/2-6-2009 Article 67.... , 14A

Article 67 safety and health, miningandenvironmental manage- (1) Regents/mayors shall issue IPR particularly to local ment,and meetthe existingstandards; population, namely individuals, groups of individuals c. manage the environmentin cooperation with the rel- andjor cooperatives. evantregional government; (2) Regents/mayors can delegatethe granting of IPR as d. pay regularfeesand production fees; and referll"d to in prlragraph (1) tn <;ub-di"hirt headc; in P. submit a periodic repnrt on thE.' reali:zation of small- accordance with the legislation. holderminingbusinesses to the issuer of IPR. (3) To obtain IPRas referred to in paragraph (I), appli- cants shell file epplicetlons to the relevant regent! Article 71 mayor. (1) In addition to the obligations as referred to in

Article 70, the holder of IPR shall also comply

Article68 with mining technical requirements in carrying out (1) The areaof miningfor 1 (one) IPRthat can begranted smallholder mining activities as referred to in Ar- to: ticle 66. a. an individual shall be a maximum of 1 (one) heet- (2) Further provisions on mining technical requirements are; as referred to in paragraph (1) are to be provided for b. a group of individuals shall be a maximum of 5 (five) in a aovemm~nt regulation. hectares; and/or c. a cooperativeshaJI bea maximum of 10 (ten) hect- Article 72 arcs. rurther provisions on the procedures of iSSUirlY (2) IPRshall be issued for a maximum period of 5 (fIVe) IPR areto be provided for in the regional regulation of the years andcan be extended. regencylmunjdpality concerned.

Article 69 Article 73 The holder of IPRsha/l have the rightto: (1) Regency/municipal governments shallnurture small- a. get nurturing and controlling services in the fields holder mining businesses in terms of management, of occupational safety and health, the environ- mining technology, capitaland marketing in an effort ment mining techniaue and manaaement from to improvetheir capabiHty. the Government and/or regional governments; (2) Regency/municipal governments shall be responsible and for technical security in smallholder mIning businesses b. obtain capita! ussi5tance in .;lccordanee with the legis covering: lation. a. occupational safetyand health; b. environmental management; and

Article 70 c. post-minIng. The holder of IPRshall : (3) To render technical security as referred to in para- a. carry out mining activities noIaterthan3 (three)months graph (2), the regency/municipal governments shall atter IPRhasbeen issued; appoint mining inspectorfunctional officials in accor- b. comply with the law and regulation on occupational dance with the legislation. Business News 7770/2-6-2009 (4) The ..... 154. (4) The regency/municipal governments shall record the (3) State-owned companies and regional government- production of all smallholder mining businesses in their owned companies as referred to in paragraph (2) shall respective territoryandreportit periodically to the Min- receive a priority in obtaining IUPK. isterandthe relevant governor. (4) Private companies asreferred to in paragraph (2) shall participate in auctions ofWIUPK to get IUPK. a-IAPTERX SPECIAL MINING BUSINESS PERMITS Article 76 Arl~'eH (1) IUPK consists aftwa phases: (1) IUPK shall be issued by the Minister by payingatten- a. IUPK for exploration covering general inspection, tion to regional interests. exploration andfeasibility study; b. lUPK tor operanonai production coveting construc- (2) IUPK asreferred to in paragraph (1) shall be issued for tion, mining, processing and purification, as well 1 (one)type of metal mineral or coal in 1 (one)WIUPt<. as transportation and sales. (3) The holder ofIUPKas referred to in paraqraph (1) that (2) The holder of IUPK for exploration and the holder finds othermineral in \VIUPK it manages shall begiven of IUPK for operational production cancarry out part a priority to manage it. or whnls nf th~ activltles as referred to in para- (4) Theholder of IUPK that intends to manage other min- graph (1). eral as referred to in paragraph (2) shall apply for a (3) Further provisions on the procedure of securing IUPK newIUPK to the Minister. as referred to In paragraph (1) are to be prOVided for (5) TheholderofIUPKasreferred to in paragraph (2) can in a government regulation. state intention not to manage the other mineral it has found.

Article 77 (6) Theholder ofIUPKthat does not intend to manage the (1) Every holder of IUPK for exploration is guaranteed to other mineral it has found as referred to in paragraph obtain IUPK for operational production as the continu- {4} shall keep the othermineral so that other partywill ation of their mining business activities. not benefitfrom it.. (2) IUPK for operational production can beissued to Indo- (7) IUPKfor other mineral as reff'rrPd to in fl~ragrnrh (4) nesian corporate bodies dS rererred lu in Alticle 75 andparagraph (5) can be issued to other partyby the paragraph (3) and paragraph (4) that have data on Minister. the results of a feasibilitystudy. Artide 75 (1) rUPK asreferred to in Artide 74 paragraph (1) shall be Article 78 issued an the basisof considerations as referredto in IUPK for exploration as referred to in Article 76

Article 28. paragraph (1) letter a shall at leastcontain: (2.) lUPK as referred to in paragraph (1) canbe issued to a. name of company; IlIwnesicm corporate bodies, namely state-owned rom- 11. slze end location of area, panies, regional govemment-owned companies and pri- c. general spatial layout plan; vatecompanies. d. statementof readiness; Business News 7170/2-6-2009 e. investment ..... 16A e. investment capital; t use ri domestic gO<Xis, services, technology, engineer- f. extended time of phases of activities; ing anddesiqn; g. rightsandobligations of the IUPK hokler; u. applicatlon of good economic andtechniCal mining prin- h. period of time for phases ofactivities; ciples; i. type of business granted; v. development of Indonesian workers; j. plan for the development and empowennent of tile w. management of data on mineral and coal; community nearthe mining area; x, conb"ol, development and application of mineral orcoal 1<. taxation; mining technology; and I. settlement of landdispute; y. share divestment. m. regulat fees and explol7ltion fees; and n. arndal, Amcle80

Article 79 lUPK taI\nOtbe usedfor pul1:lOSeS otherthan those lurKfor operational production 0::; referred to in contained in IUPK.

Article76 paragraph (1) letter b shallat leastcontaln: a. name of company; Article81 b. size of mining area; (1) In the event of exploration and feasibility study, c. mining Site; the holder of IUPK for exploration that has found d. prOcessing and purification site; quarried metal mineral or coal shall report it to e. transportation and sales; the Minister. f. investment capital; (2) The holderofIUPK for exploration that intends to sell g. period of time of phases of activities, metal mineral or coal as referred to in paragraph (1) h. settlement of [and problems; shall applyfor a preliminary pennit for transportation i. environmental management, including reclamation and andsales. post-mining; (3) Thepreliminary pennit as referredto in paragraph (2) j. funds for guaranteed reclamation and post-rnlnlnq: shall be issued by the Minister. k. validityperiodofIUPKj 1. extension oflUPK; Artide82 m. rights and obligations; The quarried mineral or coal as referred to in Ar- n, development and empowerment of the community near ticle 81 shall be subject to proctuction ft¥'<;,. the mining area; o. taxation; Article83 p. regular fees and production fees as well as income -I he requirements of the sizeof area and perlud portion of the stl.te!regions, consisting of net prodUC- of time aa:ording to groups of miniog businesses appli- tion and profit sharing since the production starts; cable to the holders of IUPKshallcover: q, settiement ofdisputes; a, the size of 1 (one) WIUPK for a phase of exploration r. occupational safety and health; for ferrous mineral mining shall be a maximum af 5. mineral or coal con5etvation; lOO.non(OOP hundredthousand) hectares. Business Kews 7770/2-.G-2OW b. the •.... 17A b. the size of 1 (one) WIUPK for a phase of opera- Article86 tional production for ferrous mineral mining shall (1) Corporate bodies as referred to in Artide 75paragraph be a maximum of 25,000 (twenty-five thousand) (2) that carry out actviues in WIUPK shall meet au- hectares. ministratlve, technical, environmental andfinancial re- c. the size of 1 (one) WIUPK for a phase of exploration quirements. for coal mining shall be a maximum of 50,000 (fifty (2) Further provisionson administrative, technical, erNi- thousand) hectares. mnmental andfinandal requirements asreferred to in d. the size of 1 (one) WIUPK for fl phose of op- paragraph (1) are to be provided for in a government erational production for coar mining shall be a regulation. maximum of 15,000 (fifteen thousand) hect- CHAPTERXTI ares. e. the period of IUPK for exploration for metal min- MINING DATA

Article 87 erai mining shall be a maximum of 8 (eight) Tosupport preparations for WP and development of years. mining scIences and technology, the Minister or governors f. the periodof IUPK for exploration for coalmining shall according to theirrespective authority can assign state and/ be a maximum of / (seven) years. or regional research institutes to conduct inspection and g. the period of IUPK for operational production for metal research on mining. mineral or coal shall be a maximum of 20 (twenty) years and can be twice extended for 10 (ten) years

Article 88 each. {l} Data obtained from mining business activities shall belong to theGovemment and/orregional governments

Article 84 according to their respective authority. Further provisions on the procedure of obtaining (2) Data owned by regional governments on mining busi- WIUPKas referred to inArtide 74 paragraph (2) and para- nesses shall be conveyed to the Government for the graph (3) andArticle 75 paragraph (3) areto be provided management of miningdata at a national level. fur in a governm~t rpglilation. (3) The meneqcrnent of dam as referred to in paragraph (1) shall be conducted by the Governmentandjor re- CHAPTER XI gional governments according to their respective au- THE REQUIREMENTS OF SPEOAL MINING thority. BUSINESS PERMITS

Article 85 Article 89 TheGovernment shall transparently make public Further provisions on the procedures of assigning the plan to carry out mining business activities in WlUP state andforregional research institutes to conduct inspec- as referred to in Article 30 and issue lUrK for explora- tion and research as referred to in Articla 87 and the man- tion andIUPKfor operational production as referred to agementof dataas referred to in f1.rticle 88 areto be pro- in Article 76. vided for in a government regulation. Business News mO/2-6-2009 CHAP'tER XIII..... 18A a-lAPTERXnI Part Two RIGHTS AND OBUGATIONS Obligations PartOne Article 95 Rights The holders of IUP and IUPKshall:

Article 90 a. apply the principles of good mining techniquej The holders of IUP and lUPK can carryout part or b. manage financeaccording to the Indonesian account- whole of phases of mining businesses, either exploration ingsystem; or operational production. C. increase the added value of mineral and/or coal re- sources; d. conduct development and empowermentof the local

Article 91 TIle holdt:lrs uf IUPand IUPK can lJel~fil rlOll1 public community; and e. complywith the tolerable limit of the supporting capac- infrastructures and facilities in the interest of mining ac- ity ofthe environment. tivitiesafter fulfillingthe legislation.

Article 92 Artide96 The holders ofIUP andIUPKshaft have the right to In applying the ptindpies of good mining technique, holdmineral, induding by-product mineral or coal they have the holders of IUP d rIU IUPK ~hdll ; produced after paying exploration feesor production fees, a. implement provisions on occupational safety and health exceptby-product radioactive mineral. in the mining se<:.tpr; b. ensure the safety of mining operations;

Article 93 c. manage and monitor the mining environment, includ- (1) The holders of IUPand lUPK are not allowedto trans- ing reclarnatlol'l and post-mining; fer the:iliUP end IUPK tv other parties, d. make mineral and coal resources conservation ef- (2) Thetransfer of ownership and/or shares at the Indo- forts; nesian stock exchange can be conducted only after e. manage mining residue from mining business ac- certain phasesof exploration have been carried out. tivities in the form of solid, liquid or gas sub- (3) The transfer of ownership and/o. shares as referred stance until it meets the environmental quality to in paragraph (2) can orily be conducted on condi- standards before being dlsposed of to the envi- tianthat: ronmental media. a. the holders of IUP and IUPK shall notify the Minis- t~ (JDvprnflr, or rPQent;!mRynr ;:!ccording to their ArtklQ 97 respective authorityof the matterj and The holders of IUPandIUPKshall ensure that the b. the transfer of ownership and/or shares doesnot application of environmental quality standards accords with I un counterto tl Ie leqlslatlon, the cnerectertsttcs of the relevant region. Artide94 Article 98 The holders of IUP and IUPK.shall be ensured of -\ he holders of [UP and !UPK shall conserve the their rightsto engage in mining businesses In accordance functionandsupporting capadty of the relevantwater re- with the legislation. 50urcesln accordance with the legislation. Business News m.O/2-6-2009 Article S9....... ,... 19A

Article 99 (2) TheNinister, governors or regents/mayors according (1) The holders of IUP and IUPK shallsubmita reclama- to their respective authority canappointthird parties tion plan anda post-mining planat the time of apply- to conduct reclamation andpost-mining Lising the guar- ing for IUP for operational production or IUPK for op- anteed funds as referred to in paragraph (1). erational production. (3) The provisions as referred to in paragraph (2) shall (2) Reclamation and post-mining shaU be earned out ac- apply if the holder of IUP or IUPK does not conduct cording to the appropriation of post-mining area. reclamation and post-mining according to the plan (3) The epproprietion of post-mlning area as referred to agreed upon. in paragraph (2) shall be put In the agreement be- tween the holder ofIUPor IUPK andthe landtitleholder Article 101........... on the use of land. { 10 be continued J

Article 100 (1) Theholders of IUP andIUPK shall make available guar- anteed funds for reclamation and post-mining. ----===( 5 )====- Business News mOj2-&2009 (3) eight. .... lA MINERAL AND COAL· MINING (law NoAf2009 dated January 12, 2009) [Continued from Business News No. 7770 pages lA-19A]

Article101 issued by the Minister, governors, regents/mayors ac- Furtherprovisions on reclamation and post-min- cording to tneu respective authority eSpecially ror pro- ing as referred to in Article 99 as well as on guaranteed eessing and purification activities. funds for reclamation and post-mining as referred to in (3) The holders of IUP and IUPK as referred to in para-

Article 100 areto be provided for in a government reg uta- graph (1) are banned from processmq and purifying fun. outputsfrom miningbusinesses that do not have IUp, IPR, orIUPK.

Article 102 The holders of !UP and IUPK shall increase the Article IDS addedvalue of mineraland/or ~I resources in carrying (1) Corporate bodies that are not engaged in miningbusi- out mining, processing and purification activities aswell as nesses and intend to sell quarriedmineraland/or coa I in making use of mineraland coal. shall first secure IUPfor operation production for sales. (2) IUP as referred to in paragraph (1) canonly be issued

Article 103 for 1 (one) sales by the Minister, governor, or regent! (1) The holders of IUP and IUPK for operatiOnal production mayoraccording to their respective authority. shall process and purify output of the domestic min- (3) Quarried mineral or coal that is to be soldas referred ing. to in paragraph (1) is subjectto production fees. (2) The holders of IUP and IUPK as referred to in para- (4) The corporate bodies as referred to in paragraph (1) graph (1) can process and purify the mining output and paragraph (2) shall submit a report on proceeds from other holders of IUP and IUPK. from the sales of quarried mineral and/or coalto the (3) Further provisions on the needto increase the added Ministe~ governo~ regent/mayor according to their value as referred to in Article 102 as well as on the respective authority. processing andpurification asreferred to in paragraph (2) are to be provided for in a governmentregulation. Article 106 The holders ofIUPand lUPK shall givea priority to

Article 104 the useof local workers, goodsand services in accordance (1) Where processing andpurlfTcation are concerned, the with the legislation. holders of IUP for operatlona I production andIUPK for . operational production asreferred to in Article. 103can cooperate with corporate bodies, cooperatives or lndl- Article 107 vlduals th",t have secured IUP or lUPK. In carryi~ out operational production, corporatel:xxl- (2) IUP secured by the corporate bodies as referredto in ies as the holders of !Up and IUPK shall involve local busi- parqgraph (1) shalt be IUPfor operational production nessmen living in the area in accordance with thelegislation.

Article 108 •..... Business News 7773/2-13-2009 2A ArtJcJe 108 CHAPTER XIV (1) Theholders of IUP and lUPK shall draw up aprogram on THE SUSPENSION OF MINING BUSINESS PERMITS the development and empowerment of the communitY. AND SPEClAL MINING BUSINESS PERMITS (2) The program as referred to in paragraph (1) shallbe Article 113 consulted with the Government, regional government (1) The suspension of mining business activities can be andcommun(ty. qranted to the holdersof IUP and IUPK : a. in caseof force majeure;

Article 109 b. in case of obstruction leading to partial or com- Further provisions: on the development and em- plete c:uspenc;inn of mining hll<:ine<;c; :IlTivitipc;; powermentof the communityas referred to in Article 108 c. if the supporting capacity of the environment in are to be provided for in a government the area can no longer shoulderthe burden of op- leyulation. cr.ltional production of mineral and/or roal re:::o~ in the area.

Article 110 (2) The suspension of miningbusiness activities as referred The holders of IUP and IUPKshall submit all the to In paragraph (l)-doe; 1I0l reUuu~ the vdlitlily period data on the results of exploration and operational produc- of IUP or IUPK.. tion to the Minister, governor or regent/mayor according (3) Anyapplication for the suspension of miningbusiness to their respective authority. activitiesas referred to in paragraph (1) letters a and b shall be filed to the Ministe~ governor or regent!

Article111 mayoraccording to their respective authority. (1) The holders ofIUP and IUPK shallsubmit periodicre- (4) The suspension as referred to in paragraph (1) letter ports ontheir business plan and realization of mineral c can be doneby the mining inspectoror on the basis and ooal miningbusiness activities to the Minister, gov- of an application from the public to the Minister, gover- ernor or regent;lmayor according to their respective nor; or regent;lmayor according to their respective au- authority. thority. (2) Further provisions on the model. type, time and pro- (5) The Minister, qovernor, or regent/mayor according to cedureof the reports as referred to in paragraph (1) their respective authority shallissue a written decision are to be provided for in a governmentregulation. on whetheror not to accept the application as referred to in paragraph (3) by providingreasons no laterthan

Article 112 30 (thirty) daysafter receiving the application. (1) After 5 (five) years of production, corporatebodies as the holders of IUPend IUPKwhose shares arc owned Artida 114 byforeign partiesshalldivesttheir shares to the Gov- (1) Suspension period due to force majuere and/or ob- ernment, regional government, state-owned company, struction as referred to in Article 113 paragraph (1) regIonal qovernment-owned companyor nationalpri- QUI be given fur 1 (one) year at the rnostond am be vate company. extended on oneoccasion at the mostfor 1 (one)year. (2) Further provisions on the share divestmentas referred (2) If within a period of time before the expiry of the to in paragraph (1) are to be provided for in a govern- suspension period the nOlClers of IUP ancl IUPK have ment regulation. beenready to carry out operational activities, the said Business News m3/2-13-2009 actiVities ..... 3A activities shall be reported to the Minister, governor or Article118 regent/mayor according to their respective authority. (1) The holders of IUPandIUPK canagain retum theirIUP (3) TheMinister, governor, or regent/mayoraccording to or IUPK with a written statementto the Minister, gov- their respective authori1y shallrevokethe decision on ernor, orregentjmayor according to their respective suspension after receiving the report asreferred to in authority by providing dear reasons. paragraph (2). (2) The returning of !Up or IUPK as referred to in para- graph(1) is declared validafter being approved by the

Article115 Minister, governor, or regent/mayor according to their (l) If the suspension of mining business activities is respective authorityafter the holders ofIUP andIUPK granted because of force majeure as referred to in meettheir obligation.

Article 113 t"'Ir.:'IlJraph (1 ) Wtpr a. the obligation of the holders of IUP and IUPK to the Government and re- Artide 119 gional governments is no longervalid. IUPor IUPK can be revoked by the Minister, gover- (2) If the suspension of mining business activities: is nor, or regent/mayor according to their respective author- granted because of obstruction as referred to in Ar- ity if: ticle 113 paragraph (1) letter b the obligation of the a. the holder of IUPor IUPK does not meet the obligation holders of IUP and IUPK to the GovernJllt::rll end re- set in the IUP or rUPK and the legislotion; gionalgovernments shall remain valid. b. the holderof IUPor IUPK commits a criminal offence (3) If the suspension of mining business activities is as referred to in this Law; or granted because of the supporting capadty of the en- c. the holderof lUP or lUPK isdeclared bankrUpt. vironment in the area asreferred to in Article 113 para- graph (1) letter c, the obligation of the holders oflUP Article 120 and IUPK to theGovernment andregional governments If after the period of time set in the IUPandIUPK shall remain valid. has expired noapplication for the expansion or extension of phases of activities isfiledor an application isfiled but it

Article116 does not meet the requirements, IUP and lUPK shall ex- Further provisions on the suspension of mining pire. business activitiesas referred to in Article 113, Article 114 and Article 115 are to be provided for in a government Article 121 regulation. (1) The holder of IUP or IUPK whose IUP or IUPK ex- pires because of the reasons as referred to in Ar- CHAPTER XV tide 117, Article 118, Article 119, and Article 120 THE EXPIRY OF MINING BUSINESS PERMITS AND shall meet and settle the obligation in accordance SPECIAL MINING BUSINESS PERMITS with the legislation.

Article 117 (2) The obligation of the holder of IUP or IUPK as re- IUPareIUPK expire because : ferred to in paragraph (1) is considered fulfilled a. tnev are returned; after receiving approval from the Minister, gover- b. they are revoked; or nor, or regent/mayor according to their respective c. their validityperiod expires. authority. Business News 7773/2-13-2009 Article 122 . iA

Article 12.2 b. consultations, planning, andeqUipment test in the (1) !Up or IUPKwhich has been returned or revoked or fields of: whose validily per ioel has expired as referred to in 1) rnlnlnqror

Article 121 shall be returned to the Minister, gover- 2) processinq and purfflcation. nor, or regent/mayor according to their respective autllortty. Artlcle lZS (2) WIUP or WIUPK whose lOP or IUPK has expired (l).If the holder of IUP or IUPK uses mining services, the as referred to in paragraph (1) shall be offered holderof IUP or IUPK shallcontinueto take responsi- to corporate body, cooperative or individual bility for mining business activities. through a mechanism in accordance with this (2) Theexecutorof miningservice business can be corpo- law. rate body, cooperative or individual according to the Classification and qualifications set by the Minister. Article-123 (3) The operator of mining service business shall give a If !Up or IUPK has expired, the holder of IUP or priority to local contractors and workers. IUPK shall submitall dataobtained from the results of ex- ploration and operational production to the Ministel; gov- Article 126 ernor, or regent/mayor i'lccording to their respective au- (l) The holder of IUP or lUPK is banned from involYinQ its thority. subsidiary and/or affiliate in mining service business in the mining business area it manages, without any CHAPTERXVl permit from the MinistQr. MINING SERVICE BUSINESSES (2) The pennit from the Minister as referred to in para-

Article124 graph (1) will be issued if: (1) The holderof IUP or IUPK :>hdU use local and/or 11<::1- a. no similar mining service compeny is found in the tional mining service companies. area; or (2) In case of no mIning service companies as referred to b. nomining service company is interested in/ableto ln paragraph (1), the holder of !UP or IUPK can use carry out the activities. other mining service companies of Indonesian legal entities. Artide 127 (3) The types of mining service businesses cover: Furtherprovisions on the operation of mining ser- a. consultations, planning, execution, and equipment Vice businesses as referred to in Article 124, Article 125 test in the fieldsof: andArticle 126are to be provided for in a ministerial regu- 1) qeneral inspectlon; lation. 2) exploration; 3) feasibility study; 4) mining construction; CHAPTERXVII 5) transportation; STAlE AND REGIONAL REVENUES 6) mining environment; Article 128 7) post-mining and reclamation; and/or (1) The holderof IUP or lUPK Shall paystate revenues and 8) occupational safetyand health. regional revenues. Business News 7773/2-13-2009 (2)The ...... SA (2) The state revenues as referred to in paragraph (1) referred to in Article 128 paragraph (5) for soil;rock shall consist of tax revenues and non·tax state rev- quarried in the mining. enues. (2) TIle holderof IUP or IUPK is subjectto production fees (3) The tax revenues asreferred to in J)a~raPh (2) Shall as referred to in Artide 126 paragraph (4) letter c for consist of: the useof soil/rock Quarried in the mining. a. taxes that becomethe authority of the Government in accordance with the laws and regulations In the Article 131 taxation field; and The amount of taxes and non-taxstate revenues b. import dutieS and excises. collected from the holder of IUP, IPRor IUPK shall be set (4) The non-tax SUIte revenues es referred to in para- based on the legislation. graph (2) shall consist of: a. regular fees; Article 132 b. explOratIOn tees; (1) TIle tariff of production fees .shall be set based on the c. prodtJCtkln fees; and level of business control, productionand the prices of d. compensation for data and information. miningcommodities. (5) The regional revenues as referredto in paragraph (1) (2) lhe tariff or productIOn fees as rererrec to in para- shah consist of: graph (1) shall be set based on the legislation. a. regional taxes; b. regionalleviesi and Article 133 c. other k!gal revenues based on the legislation. (1) Non-tax state revenues as referred to in Article 128 paragraph (4) constitutestate and regional revenues

Article 129 whichare divided based on the legislation. (1) Theholderof IUPK for operational production of metal (2) Non-taxstate revenues whichconstitute portion forthe min~ral and coal mining shalllKlv "\% (four percent) regional governments shalf be directly paidto the re- and6% (sixpercent) of net profitearned since it starts gional treasury onceevery 3 (three) monthsafter be- production to the Government and the regional gov- ing paid to the state treaSUiY. ernments respectively. (2) The portion of the regional governments as referred a-tAffiRXVID to in paragraph (1) is set as follows: THE USE OFLAND FOR MINING BUSINESS AcrrvmES a. 1% (one ~ro::nl) rOI the provinderl government; Artide134 b. 2.5% (two and a half percent) for the producing (1) Theright to WIUp, WPR, or WIUPK does notcover the regency/municipal government; and right to soilon the surfaceof the earth. c. 2.5% (two and a halt percent) ror other regertOf/ {'2.} Mining bu::.in~s llctivitie:5 Cl:Innot be carried out: in the municipal governments IocatOO in thesame province. areadeclared off-limit to mining bustness activities in accordance with the legislation. Artide130 (3) The mining business aetlVlUes as reft:rf~ tQ In para- (1) The holderof IUPor IUPK is exempted from produc- graph(2) can be carried out after a permitisobtained tion fees as referred to in Article 128 paragraph(4) from the Govemment agency in accordance with the letter c and regional taxes and regional levies as legislation. Business News n73/2-13-2009 "!'tide 135 ... , . 6A

Article 135 evaluation of mining businesses in the field of min- The holder of !UP for exploration or IUPK for ex- erai and coal. ploration can carry out aet!vltlesonly after obtcllning ap- (3) The Minister can delegate the author ity to nur ture the proval from the holder of landtitles. management of mining businesses by regeOOf/munid- pal governments as referred to in paragraph (1),to the Artide 136 governors. (1) The holderof IUP or IUPK, beforecanying out opera- (4) The Minister, governorsor regents/mayors according tional production activities, shallsettle the question of to their respective authority are responsible for nur- land titles with the holder of landtitles in accordance turing mining business activities carried out by the with the legislation. holder of IUP, IPRor IUPK. (2) The questionof land titles as referred to in paragraph (1) can be settled in stages In accordance with the Article 140 needs for land by the holderof IUP or IUPK. (1) The Ministershall supervisethe managementof min- ingbusinesses by provincial govemments and regeOOl/ municipalgovernments according to their respective

Article 137 authority. The holderof IUP or IUPK as reff'rrPd to in Article (2) The Ministercan delegate the authority to supervise 135 and Artide 136 that has settled plots of land can be the management of miningbusinesses by regency/mu- granted landtitles in accordance with the legislation. nicipal governments as referred to in paragraph (1) to the govemors. Artide 138 (3) The Minister, governors and regents/mayors accord- The right to !Up, IPR, or IUPK does not constitute ing to their respective authority shall supervise the the ownership Of lana titles. mining business activities cerrled out by the holder of !Up, IPRor IUPK. Q-lAJ1TER XIX NURlURING, SUPERVISION AND PUBUC PROTECTION Article 141 PartOne (1) The supervision as referred to in Article 140 covers: Nurturing and Supervision a. miningtechnique; Artide 139 b. marketing; (1) The Minister shall nurture the managementof mining c. finance; businesses by the provindal governments and regenO{/ d. processing of data on mineral and coal; munidpal governments according to their respective e. mineral and coal resources conservation; authority. f. occupational safety and health in the miningfield; (') Thf' nurturing asreferred to in naracranh (1) covers: g. safe mining operation; a. guidances and standards for the management of h. environmental management, reclamation and post- miningbusinesses; mining; b. counseling, supervision and consultations; l. useof localgoods, services, technology and enol- e. education andtraining; and neerlnqand designcapacity; d. planning, research, development, monitoring, and j. developmentof mining technical workers; Business News n73/2-13-2009 k. development 7A k, development and empowermentof the localcom- 139, Article 140,Article 141, Articlel142, and Articlei 143 munity; are to be provided for in a governmentregulation. I. CDntrOl, development andapplIcation ornilnlng tech- nology; Part Two m. other actiVities in the field of mining businesses in Public Protection theInterests of the public; ArOde 145 n, management of IUP or IUPKiand (1) Community members who are directly exposed to the o, quantity, type, andquality of the output of mining negative impactof mining business activities shall have businesses. the right to : (2) Supervision as referred to in paragraph (1) letter a, a. get fair compensation as a result of the misman- letter e, letter f, letter g, letter h, and letter 1 is con- agementof miningactivities in accordance with the ducted by mining inspectors in accordance with the legislatioo. legislation. b. file a lawsuit with the court againstthe losses re- (3) 1f fl@ither the provincial governments nor reoencv! sulting from the mismanagement of mining busi- municipal governments have mining inspectors, the Min- nesses. ister shall assign appointedmining inspectors to con- (2) Furtherprovisions on the publicprotection asreferred duct the nurturing and supervision as referred to in to in paracraph (1) are set based on the legislation. paragraph (2). CHAP1£R.XX

Article 142 RESEAROf AND DEVEL.OPMENT AS WELL AS (1) Governors and regents/mayors shall report the real- EDUCATION AND TRAINING izationof mining businesses in their respective areas PartOne at least once every 6 (Six) months to the MInIster. Research end Development (2) The Government may reprtmarrl reJIonal governments Artide 146 If the execution of their authority runs counter to this The Government and regional governments shall Law and other laws and regulations. encourage, conductand/or tacnltate mlrleraland coal re- search and development

Article 143 (1) Regents/mayors shall nurture and supervise small- Part Two holder mining businesses. Education andTraining (2) Further orovisions onthe nurturing andsUpelVision of A.rticle 147 smallholder mining businesses are to be provided for The Government and regional governments shall in the regional regulations of the regencies/municipali- encourage, conductand/or facilitate education and train- ties. ing in the management of mineraland coal.

Article 148

Article 144 Th£! Government, regional governments, pri- further provisions on the standards and proce- vate sector and community can conduct education and dures of nurturingand supervlslon as referred to in Article training. Business News 7773/2-13-2009 SA CHAPTERXXl (3) Ovil servantinvestigators as referred to in paragraph INVESTIGATION (1) shalt stoptheir investigation ifthere is no suffident

Article 149 evidence and/or the case is a criminal orrenu:. (1) In addition to investigators of the Indonesian Police, (4) The authority as referredto in paragraph (2) and para- civil servants whose scope of duty and responsibility graph (3) shalt be carriedout in accordance with the covers !:he rmnl"9 sector shall be gIVenspecIal authOr- legISlation. Ity asinvestigators in accordance with the legislation. (2) The civil servant investigators as referred to In para- 0iAPTER XXII graph (1) shall have the authority to : ADMINISTRATIVE SANcnON a. Investigate the truth of reports or information re- Artide 151 lated to commaJ offern:es in mining business ac- (1) The MInister, governors, or regentsJmayors according tivities; to their resPective authority have the right to impose b. investigate individuals or bodies suspected of com- admlnlstratfve sanction on the holders of Iup, IPR or mitting criminal offences in miningbusiness activi- IUPK for violating provisions in AJtide 40 paragraph ties; (3), Artide 410 paragraph (5), ArtIcle 41, Article 43, c. summon and/or take by force peopleto be heard Article 70, Article 71 paragraph (1), Article 74 para- and Questioned as witnesses or suspects In crimi- graph (4), Artide 74 paragraph (6), Artide 81 para- nal offenres In mining business activities; graph (1), Article 93 paragraph (3), Artide 95, Article d. search places and/or facilities believed to have been 96, Artide 97, Artide 98,Article 99, Article 100,Article used to commit criminal offences in mining busi- 102, Article 103, Article 105 paragraph l"), Article 10~ ness activities; paragraph (4), Article 107, Article 108paragraph (1), e. investigate miningfacilities and infrastructures and Artide 110, Article 111 paragraph (1), Article 112 para- stop the use of equipment believed to have been glUph (1), Article 11-4 paragraph (Z), Article 11!i para- used to commit criminal offences; graph(2), Article125paragraph (3), Artide 126para- f. seal and/or confiscate mining equipment used to graph (1), Article 128paragraph (1), Artide 129para- commit crmlnal offencesas evtdenCej graph (1), or ArtICle 130 paragraph (2). g. invite and/or ask for assistance from experts (2) The administrative sanction as referred to in paragraph needed to.investigate Crfminal offences: in mining (1) shall oome in the fonn of : business actiVities; and/or a. written warning; h. stop investigations into Olminal cases in mining busi- b. suspension of part or whole of exploration or op- ness actiVities. erational production; and/or c. revocation of!Up, IPR, or IUPK. Artidel50 (1) Ovll servant investigators as referred to In ArtkJe 149 Article 152 can arrestmOlinal suspects in mining business activities. If regional governments do not implement provi- (2) CivilservantInvestigators as referred to in paragraph sions In Artide 151and the resultsof evaluation made by (1) c;.hall notify the start of investigation andsubmitthe the Minister as referred to In Article 6 paraeraph (1) letter results of their investigation to the Indonesian Polirein j, the Minister can suspend and/or revoke IUP or IPR in accordance with the legislation. accordance withthe legislation. Business News 7773{2-13-2009 Article 153! ..• 9A Artide 153 Article 159 If regional governments object to the suspension The holderofIUp' IPR,or IUPK who intentionally and/or revocation of !UP and IPR by the Ministeras re- submits the report as referred to in Article 43 paragraph (t:rrW to ill A.rtide 152, the regional governments can mise (1), Artide 70 letter e, Article 81 paragr,.,ph (l), Article the objection in accordance with the legislation. 105 paragraph (4), Article 110, or Article 111 paragraph (1) by providing incorrect or falseinfonnation shall be sen- Articlel~4 tenced to a maximum of 10 (ten) years In Jail and nnec a Any dispute arising from the execution of IUP, IPR, maximum of Rp10,OOO,OOO,OOO (ten billion rupiahs). or IUPK shall be settled through the domestic court and arbibation in accordance with the legislation. Article 160 (1) Anybody who conducts exploration withoutIUPor IUPK

Article 155 asreferred to in Article 37 or Article 74 paragraph (1) Any legalconsequence arising from the suspen- shall be sentenced to a maximum of 1 (one) yearand sian and/orrevocation of IUP, IPR or IUPK as referred to in fined a maximum of Rp200,OOO,OOO (two hundred mil- Artide 151 paragraph (2) letter b and letter c shall be settled lion rupiahs). in accordance with the legislation. (2) Anybody who holdsIUP for exploration but conducts operational production shall be sentenced to a maxi- Artide 156 mum of 5 (five) vears in jail and fined a maximum of Furtherprovisions on the procedure of imposing RpIO,OOO,Ooo,OOO (ten billion rupiahs). administratiVe sanction as referred to in Article 151 and

Article 152 are to be provided for in a government regula- ArI:ide 161 tion. Anybody or holder of lUP for operational produc- tion orIUPK for operational productionthataccommodates,

Article 157 benefit5 from, processes and purifies, transports, sells min The regional governments which do not meet pro- eraland coal that do notcomefrom the holder of IUp, IUPK visions in Artide 5 paragraph (4) shall be subject to ad- or permitas referred to in Article37, Article 40 paragraph ministrativesanction Inthe fohn of temporarywithdrawal (3), Artide 43 paragraph (2), Artlde 48, Article 67: of their authority over the right to manage mineral and paragraph (1), Article 74 paragraph (1), Article 81 para- coal mining businesses. graph (2), Article 103paragraph (2), Article 104paragraph (3), or Article 105 paragraph (1) shall be sentenced to a Q-IAPTER XXIII maximum of 10 (ten) years in jail and fined OUMINAL PROVISIONS Rp10,OOO,OOO,OOO (ten billionrupiahs).

Article 158 Anybody whocarries out miningbusiness without Article 162 IUP, IPRor IUPK as referred to in Article 37. Article 40 Anybody who obstructs or disrupts the mining busi- paragraph (3), Artide48,Article 67 paragraph (1), Article ness activities of the holder of nJP or IUPK that has met the 74 paragraph (1) or paragraph (5), shall be sentenced to qualifications as referred to in Artide136 paragraph (2) shall a maximum of 10 (ten) years in jail and fined a maximum be sentenced to a maximum of 1 (one)yearinjail or fined a of Rp10,000,000,000 (ten billion rupiahs). maximum of Rp100,OOO,OOO (onehundred million rupiahs). Business News 7773{2-13-2009 lOA

Article 163 Article 167 (1) If the criminal offence as referred to in this chap- WP shall be managed by the Ministerin a nation- ter is committed by acorporate body, in addition ally-integrO"ltPt"l WP lntnrmatlon c;yc;.tp,m tn harmonba thp to jail sentence and fine imposed on its manage- coordinate system and basicmap in issuing WUP, WIUp, ment the corporate body shall also be subject to WPR, WPN,WUPK and WIUPK. nne pius 1[3 (one-third) or the maximum fine Im- posed on it. Article 16B (2) In addition to the fine as referredto in paragraph (1), Toincrease investment in the mining field, the G0v- the corporate body can be subjectto additional sanc- ernment can provide tax refief and facilities in accordance tion in the form of: withthe Ieg~, exceiXotherwise stipulated inIlP orIUPK. a. the revocation of business permit; and/or b. the revocation of statusof the corporate body. CHAPTERXYN TRANSI110NAl PROVISIONS AI tide 16"1 Article 169 In addition to provisions in Article 158, Artide 159, When this law begins to take effect:

Article 160, Article 161, and Article 162, the perpetrator a. Contracts of work and agreements of work for the op- of criminal offence can be subjectto additional sanction in erationof coalminingthat havebeenin existence be- the form of : fore this Law comes into force shall remain valid until a. the seizure of equipmentusedto commit the criminal the contracts/agreements expire. offence; b. Provisions in article of the contracts of work and agree- b. the seizure of profit earned from the criminaloffence; ments of work for the operation of coal mining as re- and/or ferred to in letter a shall be adjusted to this: Law no c. the obligation to pay all expenses arising from the crimi- later than l(one) year after this Law is promulgated, naloffence. except on state receipts. c. Exception to state receipts as rererreo to In letter b Is

Article 165 an effort to raise state receipts, Anybody that issues IU?, IPR, or IUPK in bread1 of this Lawand abuses his/her authority shall be sentenced Article 170 to a maximum of 2 (two) years in jail and fined a maxi- The holders of contract d workas referred to in Ar- mum of Rp200,OOO,ooo (two hundred million ruplehs). tide 169l:Mt h:we heen engaged in production shall conduct purification asreferred to in Artide 103 paragraph (1) nolater CHAPTER XXIV than5 (five) years afterthis law has been promulgated. OTHER PROVISIONS

Article 166 Article 171 Any problem that arises from the execution of IUp, (1) The holders of contract of workand agreement of work IPRor IUPK with regard to environmental impactshall be for the operation of coal mining as referred to in Ar- settled in accordance with the legislation. ticle 169 that have conducted phases of activities in exploration ..... llA exploration, feasibility study, construction or operational Article 174 production, no later than 1 (one) year after this Law Theregulations needed to implement thislaw shall has been promulgated, shall submit a business plan be stipulated 11U ldlt::r U Idll 1 ( 01 ie) yt:dr dfLer Uli~ [.qw has for all areas of contract/agreement until the expiry of been promulgated. the contract/agreement to secure approval from the Government (2) If the provisions as referred to in paragraph (1) are Article 175 not fulfilled, the size of mining eree thet hes been given This Law shall come into force as from the data of to the holders of contract of work and agreementof promulgation. work for the operation of coal mining shall be adjusted For public cognizance, this Law shall be promul- to this Law. gated by placing it in the Statute Book of the Republic of Indonesia.

Article 172 Appl ications for contractof work and agreement of work for the operation of coal mining that have been filed to the Ministerno later than 1 (one) year beforethis Law is put into force and have secured in-principle ap- Endorsed in Jakarta proval or permit for rrf>liminrlry lnspectlon shall continue on January 12, 2009 to be respected andcan be processed without any auction THE PRESIDENT OFTHE REPUBUC OF INDONESIA, based on this law. sgd. DR. H. SUSlLO tsAMtsANG YUDHOYONO CHAPTER XXVI CONQUSION

Article 173 (1) When this Law begins to take effect, Law No. 11/1967 on the prinCiples of MinIng (Statute Promulgated in JlIMrm Book of 1967 No. 22, Supplement to Statute on January 12, 2009 Book No. 2831) shall be revoked and declared TI-lE MINISTER OFLAW AND HUMAN RIGHTS, null and void, sgd. (2) When this Law begins to take effect, all regulations ANDI MATTAlATTA wh ich serve asthe ImplementaUun requlations of U1W No. 11/1967 onthe Principles of Mining (Statute Book of 1967 No. 22, Supplement to Statute Book No. 2831) shall remain valid, provided they do not run counter to STATUTE BOOK OFTI1E REPUBllC OF INDONESIA thts Law. OF2009 NO.4 Business News 7773/2-13-2009 EJJJCTDATlQN. , ' L.... 1l.A ELUCIDATION OF LAW NOA/2009 ON MINERAL AND COAL MINING 1 GENERAL the operation and management of mineral and coal The 1945 Constitution, Article 33. paragraph (3) af- mining. firmsthat land, waters andnatural resources contained This Law contains main thoughtsas follows: therein arecontrolled by the state andare used for the 1. Mineral and coal asunrenewable resources are con- greatest possible benefit of the people's prosperity. Con~ trolled by the state and the developmentand effi- sidering that mineral andcoalasnatural resources con- cient useof mineral and coal are conducted t:y the mined in the eerth constitute unreneweble neturel re- Government and regional governments! along with sources, theymustbe managed asoptimally, efficiently, business players. transparently! sustainably, environment-friendly and 2. TheGovernment latergives opportunities to corpo- fairlyaspossible for thegreatestbenefit of the people's rate bodies ofIndonesian legal entity, cooperatives, prosperity in a sustainable way. individuals andthe local community to operate min- Tomeet provisions in Article 33 paraoraph (3) of the eraiandcoal mininobased on permits andthose in 1945 Constitution, Law No. 11/1967 on the Principles line with the regional autonomy are given by the of Mining has been issued. During its more than four Government and/orregional governments accord- decades of existence, the laW hasconmbUted sjgnltl~ mg [0 theIr respecnve autnonty, cantcontributions to the national development 3. Within the frame of decentralization and regional In further developments, the law whose content is autonomy the management of mineral andcoal min- centralistic in nature is no longer relevant to the cur- ingis based onthe principles of externality! account- rent situation and future challenges. In addition, the abilityandefficiency involving the Government and development of the mining sector must adjust itself to regionalgovemments. the strategic environmental changes, either at a na- 4. Mining businesses mustbe able to givethe greatest tionalor international level. The mainchallenge facing possible economic andsocial benefitto the Indone- the mineral andcoalmining is the impactof globaliza- sian people's welfare. tion that encourages democratization, regional au- 5. Mining businesses must be able to speed up the tonomy, human rights. environmental protection, de- development of areas, boost the economic activi- velopment of technology and information, intellectual tiesofthe communityfsmaU·and medium-scale busi- property rights and demand for an increased role of nessmen andencourage the growthof mining-sup- the prIVate sector andtne comrnunlty. porting industries. To face the strategic environmental challenges and 6. To ensure sustainable development! mining busi- answer all the problems, it is necessary to enact a new ness activities mustbecarried out by observing the lawon mineral and coal mining to serve asa legal basis principles of the environment, transparency andpub- for the reformation and rearrangement of activities in lic partidpation. Business News 7773/2-13-2009 II. ARTICLE . 13A D. ARTICLEBYARTIOLE Artide 7 up to Article 14

Article 1 Sufficiently dear. SuffICiently dear. Artide 15 The delegated authority ic; the (luthoritv in setting

Article 2 WUP for non-metal mineral and rock in one regency! Lettera up to Letter c municipality or in more than one regencies/municipali- Sufficiently dear. ties. Letter d The principles of sustainabilrty and environment-

Article 16 orientation referred In herPinare the well~planned prin- ~umclently clear. ciples which integrate economic, environmental and sodo-cuttural dimensions in all mineral and coal min-

Article 17 ill9 businesses to create proSperity at present and in Referred to as size is either maximum or muu- the future. mumsize. Borders are set under experts' viewsacceptable Artide j Up to Article 5 to all parties. Sufficiently clear.

Article18 up to Artide 20

Article 6 Suffidentlydear. Paragraph (1) letter a and Letter b

Article 21 SuffldentlY dear. WPR is setbased 011 the plan by synchronizing data letterc andinformation through the WP information system. National Standards in the field of mineral andcoal mining aretechnical specifications or something stan- Altic!e22 dardized. Letter a Letter d lip to Letter r Referred to as the slde and riverbank is the area SuffICiently clear. of accumulating secondary mineral enrichment (pay letters streak) in the meanderof river. Referred to as the balance s.heet of mineral and letter b up to Letter f coal resources at a national level is the balance sheet Sufficiently clear. whichdemonstrates the quantity of resources, depos- Its and producuon of mineral and C<Jal on a national Altic!e23 scale. Announcement on the WPR plan is madeat the Letter t andletter u office of village head and the relevant office/agency, Sufficiently Clear. complete with a situation map demonstrating location, size, and boders aswell as coordinate list in addition to Paragraph (2) list of the holders of titles to land located in WPR. Sufficiently dear. Business News n73/2-13-2009 Artide24.•.•. 14A

Article 24 up to Article 26 Article30 Sufficiently clear. Sufficiently dear.

Article 27 Article31 Paragraph (1) Referred to as size is either maximum or rnlnl- The setting of WPN in the national interests is mum size. meant to encourage the national economic growth, Bordersare set based on experts' views accept- energy resilience and national strategic industries as able to allparties. well as to increase the competitive edge of national industries in the face of globalchallenges. Article 32 and Article 33 Certain commodities referred to herein include coc- SuffIciently clear. per, tin, gold, iron, nickel and bauxite as well ascoal. Theconservation referred to herein also includes Article34 efforts to manage mineraland/or coal whose sources Paragraph (1) are limited. Letter a and Letter b Sufficiently dear. Paragraph (2) P"'r",ornph (7) Referred to as part of its area is meantto set the Letter a percentage of the sizeof the area to be managed. Referred to as radioactive mineral mining is the mining es referred to in the law on nuclear power. Paragraph (3) Letterb Referred to as the time limit is that WPN set for Metalmineral mining referred to herein includes conservation can be managed after (:l certain penod ur mineral bv-products. time haspassed. Letter c and Letter d SuffiCiently dear. Paragraph (4) Paragraph (3) Sufficiently clear. Sufficiently dear.

Article 28 Article35 up to Article 37 Sufficiently clear. Sufficiently dear.

Article 29 Article 38 Paragraph (1) Letter a Referred to ascoordination isaccommodating all Corporate bodies referred to herein also include regional interests related to WUPK in accordance with state-owned companies and regional government~ the legislation. owned companies. Paragraph (2) Letter b and Letter c Sufficiently dear. Sufficiently clear. Business News 7773/2~13~2009 Article 39 ..... lEiA

Article 39 Paragraph (4) Paragraph (1) The period of 7 (seven)yearscovers 1 (one) year SuffICiently dear. rI general inspection; 2 (two) vears of exploration which Lettera up to Letterc can be extended twicecovering 1(one) year each; and Sufficiently clear. 2 (two) yearsof feasibility study. Letterd statement of readiness referred to herein includes Article 43 up to Article 45 environmental management lDst as a result of exphr SuffICiently dear. ration act:ivities. Lettere up to Letter n Artide46 Suffidentty dear. Paragraph (1) Paragraph (2) SUffidently dear. Suffldentlydear. ParaglClph (2) Referred to as data on the resUlts of feasiblJity

Article 40 and Article 41 study aresynchronized data owned bythe Govemment Sufftciently dear. andregional govemments. Artide42 Paragraph (1) Artide47 The period of 8 (eight) years covers 1 (one) year Paragraph (1) of general inspection, 3 (three) years of exploration The period of 20 (twenty) years referred to herein which can be extended twice covering 1 (one) year includes 2 (two) years of construction. each; 1 (one) of feasibility study which can beextended Paragraph (2) twicerovering 1 (one) year each. SuffICiently dear. Paragraph (2) Paragraph (3) The JJl'!riod of 3 (f"hree) yea~ covers 1 (one) of Referred to 'JS non merel minel<l.lsof certe.ill typt:::; general inspection; 1 (one) year of exploration and 1 include limestone, diamond and preciOus stone. (one) year offeasibillty study. Theperiod of 20 (twenty) years referred toherein Referred to as non metal minerals of certain type:.> covers 2 (two) years otconstruction. include limestone for<:ement industry, diamond and pre- Paragraph (4) cious stone. Suffidently clear. TIle petiud of 7 (seven) yeas covers 1 (one) year Paragraph (5) of general inspection; 3 (three) years of exploration The period of 20 (twenty) years referred to f1erein which can be extended twice covering 1 (one) year covers 2 (two) years of construction. each; 1 (one) year of feasibility study which can be extended once for 1 (one)year. Artide 48 up to Artide 50 Paragraph (3) Suffidently dear. The period of 3 (three) years covers 1 (one) year Article 51 of general inspection; 1(one) year of exploration and 1 Metal mineral mining referred to herein include (one)yearof feasibility study. by-product mlnerals, Business News n73/2-13-2009 Article 52 .... 16/\

Article52 Article61 Paragraph (l) Paragraph(1) Sufficiently dear. 5uffidently dear. Paragraph (2) Paragraph (2) If in WIUP there are other minerals found in dif- If in WIUP there are other minerals found in dif- ferent places vertically or horizontally, other party can ferent places vertically or horizontally, other party can manage the mineral in question. manage the mineral in question. Paragraph (3) ~ragrarh (3) Suffldently dear. Sufficiently dear. Artide 53 and Artide 51- Article 6~ up to Artide 66 Sufficiently dear. SuffICiently dear. AIt1Cle 55 Artldt: 67 Paragraph(1) Paragraph (1) and paragraph (2) Sufficiently dear. Sufficiently dear. Paragraph (2) If in WIUP there are other mineralsfound in dif- Paragraph (3) ferent places vertically or horizontally, other partycan -The application referredto herein musthave ad- manage the mineral in question. equate duty stamp and a recommendation from the Paragraph (3) village head/customary chief about the truth of the Sufficiently. history of the applicantto receive a priority to get IPR.

Article56 and Article57 Article 68 and Article 69 Suffidently dear. 5uff"lcientl'l dear. Artide 58 Article70 Paragraph (1) Letter a and Letter b SuffICiently dear. Sufficiently dear. Letterc paragraph (2) EnvironmenUll meneqernent activities cover pre- If in WIUP there are other minerals found in dif- vention and control of pollution and restoration of the ferent places vertically or horizontally, other party can environment induding reclamation of former mining manage the mineral in question. siteS. Paragraph (3) Sufficiently dear. Letterd SuffICiently dear.

Article 59 and Article60 Lettere Sufficiently clear. Reportis submitted onceevery4 (four) months. Business News n73/2-13-2009 Article71 •.... 17A Artide 71 up to Article 73 accordance with the legislation. Sufficiently dear.

Article 00 up to Article 02 Artide74 Suffidently dear. Paragraph (1) Observing the regiOnal interests referred to herein Artfde83 means empowering regions. letter a up to letter d Paragraph (2) Sufficiently dear. Metal mineral mining referred to herein includes L.ettere by-product minerals. The period of 8 (eight) yearscovers 1(one) year Paragraph (3) up to Paragraph (7) of general inspection, 3 (three) years of exploration Sufficiently dear. which can be extended twice covering 1 (one) year eam; 1 (one) year of feasibility study whim can be

Article75 and Artide 76 extended oncefor 1 (one) year. Sufficiently dear. Letterf The period of 7 (seven) yeas covers 1 (one) year Artide 77 of general inspection; 2 (two) years cI exploration which Paragraph (1) can be extended twice covering 1 (one) yeareach; and Suffidently dear. 2 (two) years offeasibility study. Paragraph (2) LAtPrg Referred to as data on the results of feasibility The period of 20 (twenty) years reterred to herein study are syndlroniZed dataowned by the Government covers 2 (two) yearsof construction. and regioncll guvenunents. Artide ~ up to Article 92 Artide 78 Suffidentfy dear. letter a up to L..etter c SuffidentIy dear. Artide93 letterd Paragraph (1) Statement of readiness includes environmental Sufficiently dear.. management costarising from exploration actiVities. letter e up to Letter n Paragraph (2) Sufficiently dear. Referred to as certain phases of exploration are the discovery of 2 (two) prospective areasin explore-

Article79 tion actiVities. Lettera up to Letterx Paragraph (3) Suffidentiy dear. Suffkiently dear. L..ettery The inclusion of dause sharedivestmentis valid Article 94 and Article 95 only if the shares are owned by foreign investors in SuffICiently dear. Business News 7773/2-13-2009 Article 96 ..... lBA Artide96 Paragraph (2) and Paragraph (3) Letter a up to l..etOOr d ~tIy~r. Suffidently dear. Artide104 Suffidenttydear. Lectere Referred to as mining residue indudestailing and Article 105 coal waste. Paragraph(1) Referred to as shall first secure IUP ror opera- ArtIde97 tional production for sales is theeffort to take care of a SuM:ietttfy dear. pennit to transport and sell quarried minerals and/or a>aI. Al'tide98 Paragraph(2) 1'heseprcMsions are needed a:msidering that min- Pe«nit is issued aftera.n audit a.nd ewtuation of ing businesses in water soerees een changethe rnor- quarried mineralsand/or coal has been done by the pho\og'J of water soerces, either at the upper or lower relevant teehnita\ agency. reach of water sources. Paragraph (3) and Paragraph (4) StJfficiently dear. ArtiCle -99 and 'Artide ioc SufFiciently clear. ArticlE'! 1M The use of local workers always ccnslders

Article 101 the competency of workers and the know how of Pfovi:5ivns un 9U'"cmteed funds on Jeclomlltioo end workers. guaranteed funds on post-mining rover the amount, These provisions aremeant to support and grow procedure of paymentand disbursement. and rr=pott the natiClnal capabiUty to be able to compete with other on the use of guaranteed fimd~. natIOnS. Artidel02 ArUPe 107 Added value referred to herein is meant to im- SuffICiently dear. prove the final prodUd5 of mhlingbuslnesses or the use of by-product minerals. Article 108 Paragraph(1)

Article 103 SUffidently dear. Paragraph (1) The obligation to conduct domestic process- Paragraph (2) ing and puriftcation IS. intended among others to Referred to as the community is the community improve and optimize th~ mll'll.,g var(J~ of prod- domiciled around the minin" oPeratiOnS. ucts, the supp\y of raw materials to industries, the absorption of labour force, and an increase Article 109 up to Article 112 In state revenues. Sufficiently dear: Rusines5 News n73J2-13-2009 Article 113.,....... 19A

Article 113 Article 119 Paragraph (1) SufFldentty dear. tenere Force majeure referred to herein includes war, Article 120 civil unrest, rebellion, epidemic, earthquake, flood, fire Improvement referred to.herein means an increase and natural disasters beyond the capacity of human from the phase of exploration to the phase of opera- beings. tionalproductiOn. letterb Obstruction referTed to herein includes blockade, Article 121 up to Article 123 strike, and labour dispute out of the mistakes of the Sufficiently dear. holder d lOP or IUPK and the lawand regulation issued by the Government so that the ongoing mining busi- Article 124 ness activitiesareobstructed. Paragraph (1) Letterc National companies can set up their branches in SuffICiently dear. regions. Paragraph (2) Paragraph (2) and Paragraph (3) Sufficiently dear. ~uffidently dear. Paragraph (3) Application mustcontain explanations onthe f'ora! Article 125 up to Article 134 tmljeure and/or obstruction leading to the parti~1 or Sufficiently clear. total stoppage of mining business activities. Paragraph (4) Article 135 ApplICatIOn rrom the community mustcontainex- Approval flom the holder of land UUe:; ls 1T1~lIllo planations on thesupporting capacity of the local envi- settleplots of landdisrupted by exploration actiVities, ronment related to miningbusiness activities. such asdrilling, test ditchandsampling. Paragraph (5) SUfficiently dear. Artide 136 UDto Article 144 ~ufficiently dear. Artide 114up to Article 117 Sufficiently dear. Artide 145 Paragraph (1)

Article 118 The community referred to herein arethosewho Paragraph (1) are exposed to the direct negative Impact of mining (1P1Ir rPac;onc; refurrE=!d to herein include the ab- business actiVities. senee of prospects in technical, economic or environ- Paragraph (2) mental terms. Sufficiently dear. Paragraph (2) Article 146 up to Article 164 Sufficiently dear. Suffidently dear. Business News n73/2-13-2009 Article 165 ....• ZOA

Article165 the agreement of work. for the operation of coalmining Referred to asanybody is the offidal issuing IUP. must be adiusted to this Law. IPRorIUPK. Letterc Sufficiently dear. Artid~ 166 up to Article 168 Sufficiently dear. Article 170 up to Artide 175 SuffICiently dear.

Article 169 Lettera SUPPLEMENT TOSTATUTE BOOK OF Sufficiently dear. TliE REPUBUC OF INDONESIA NO. 4959 Letterb All articles contained in the contractof work and -===( S )===- Business News m3/2-13-2009 Article 10 ••...