Finance & Projects Jakarta | Singapore Client Alert June 2015 Extension of ban on Coal Trading Licenses As noted in our previous Client Alert, in June 2014, the Director General of Mineral and Coal ("DGMC") placed a one year ban on the issuance of new coal trading licences for any company wishing to engage in the cross-province or export sale of coal. The stated reasons for the ban at that time was for the Government to try to tackle the problem of illegal trade and exports of coal. The basic philosophy behind the ban was that if coal trading intermediaries were taken out of the equation, the only legitimate exporters of Indonesian coal being the holders of mining concessions themselves, and it would therefore be easier for the Indonesian Government to track coal exports and catch illegal exports of coal. The ban introduced in 2014 was that (i) no new coal trading licences could be granted to anyone, and (ii) existing licensed traders that had their licences were not able to add additional supply sources to their licences (i.e. those licence holders would only be able to trade coal in the quantities from and from the supplying mines specifically listed on their trading licences). The one year ban expired on 16 May 2015. Pursuant to DGMC Instruction No. 02.Ins/30/DJB/2015 dated 29 April 2015 ("Instruction 2/2015"), the DGMC has extended the ban on the granting of new coal trading licences until 16 May 2016. The extension of the ban is effective from 16 May 2015. There is some relief granted to the holders of existing trading licences. Unlike the 2014 suspension which banned both the granting of new trading licences and also the expansion of supply sources or volumes under existing licences, Instruction 2/2015 states that the ongoing suspension is only applicable for new applications for trading licenses. Accordingly, on strict reading of Instruction 2/2015, a holder of an existing coal trading licence can apply to DGMC for the addition of new supply mines or new volumes to its existing licence. Whether this is how the new Instruction 2/2015 is interpreted and applied in practice is yet to be seen. www.bakermckenzie.com For further information please contact Luke Devine Foreign Legal Consultant +62 21 2960 8600 firstname.lastname@example.org Norman Bissett Foreign Legal Consultant +62 21 2960 8678 email@example.com Muhammad Karnova Partner +62 21 2960 8699 firstname.lastname@example.org Jeremia Purba Associate +62 21 2960 8592 email@example.com Hadiputranto, Hadinoto & Partners* The Indonesia Stock Exchange Building, Tower II, 21st Floor Sudirman Central Business District Jl. Jendral Sudirman Kav. 52-53 Jakarta 12190, Indonesia www.hhp.co.id Milan Radman Principal +65 6434 2641 firstname.lastname@example.org Baker & McKenzie.Wong & Leow* 8 Marina Boulevard #05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 www.bakermckenzie.com/Singapore *Hadiputranto, Hadinoto & Partners and Baker & McKenzie.Wong & Leow are member firms of Baker & McKenzie International. ©2015 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.