The Indonesian Minister of Energy and Mineral Resources has issued the implementing regulation for the realization of the obligation of Holders of Mining Business Permits to process or refine domestic mining products for the purpose of increasing the minerals’ added value (“MEMR Regulation”), as set forth in Article 96 and Article 111 of Government Regulation No. 23 of 2010 regarding Implementation of Mineral and Coal Mining Business Activities (GR 23/2010).
The MEMR Regulation basically regulates the manner and procedure for the minerals’ added value increase; the obligations of holders of the Operation Production Mining Business Permit (IUP Operasi Produksi) and holders of Operation Production Special Mining Business Permit (IUPK Operasi Produksi) for processing and refining; and the administrative functions for non compliance of the obligation.
Holders of IUP Operasi Produksi and IUPK Operasi Produksi who are economically incapable to process and/or refine the minerals themselves may cooperate with other parties who hold a Mining Business License in the activities. These IUP and IUPK holders may also build processing and refining facilities jointly with other business entities, and conduct research and studies in mineral processing and refining in cooperation with research institutions and universities.
The MEMR Regulation was enacted on 6 February 2012 and became effective on the same date.