MEMR Regulation No. 7 - 2012
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Transcript of MEMR Regulation No. 7 - 2012
IMPLEMENTATION OF MEMR REGULATION NO. 7/2012RELATED ENHANCEMENT OF MINERAL ADDED VALUE
THROUGH MINERAL PROCESSING AND REFINING ACTIVITY
DIRECTORATE GENERAL OF MINERAL AND COALMINISTRY OF ENERGY AND MINERAL RESOURCES
Jakarta, June 2012
Table of Contents
I. PREFACE................................................................................................................ 3
II. MAIN POINT OF MEMR REGULATION NO7/2012............................................. 10
III. CURRENTCONDITION........................................................................................... 15
IV.FOLLOWUP............................................................................................................. 21
V. REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER & EXPORT
PREFACEI.
1. Mineral and coal is non-renewable resources that must be managed by state
government, then the management should provide added value for national
economic to achieve prosperity and welfare of the people.
2. To reach the goal in point 1 above, so the management of mineral and coal
mining must give benefits, fairness and balance, as well as alignments to the
interests of the nation.
3. Based on regulation that stated in Law Number 4 Year 2009 about Mineral and
Coal Mining, there’s an obligation in increasing the value-added of mineral and
coal through local processing and refining industry.
I. PREFACEI.1. Problem Background
MEMR Regulation No 7/2012Feb 6th 2012
Law No 4/2009 Jan 12th 2009
Inventory of processingand refining facilities plan
Feb 2010 – Jan 2012
Government Regulation No 23/2010Feb 1st 2010
Due Date for IUP OP and Contractof Work holders
in Operation Production Activity StageJanuari 12th 2014
National IUPReconciliation
May 3rd – 6th 2011Mineral
Processing
and Refining
in Local
Industry
Government Regulation No52/2011
(Tax Facilities)Dec 22nd 2011
_ Certainty of supply
_ Development of upstream
industry
_ Research and developmen
I. PREFACE (Continued)I.2. TIMELINE OF MINERAL PROCESSING ANDREFINING
MEMR Regulation No 11/2012May 16th 2012
Problem:• There are big numbers of nickel ore export in
2011 (33 million tonnes), that increases for800% compared to year of 2009 when Law No4 Year 2009 released. This condition doesn tencourage local Nickel/Stainless Steelindustry.
Nickel Ore Export (Million Ton)
Economic Impact:• Encourage local nickel processing industry
with demand of nickel ore 18 milliontonnes/year.
Policy strategy:• Synchronization with the laws and
regulations.• Apply DMO regulation to fulfill local demand
of nickel/stainless steel industry.
Rare earth minerals :Scandium, Lantanum,
Yttrium
Added valuefrom ore intometal is 19 X
Problem:There are big numbers of iron ore and iron sand
export in 2011 (13 million tonnes), thatincreases for 800% compared to year of 2009when Law No 4 Year 2009 released. Thiscondition makes iron ore/iron sand reserveswill run out in next 9 years. This conditiondoesn t encourage local steel industry.
Iron Ore Export (Million Ton)
Economic Impact:Encourage local iron ore/iron sand processingindustry (sponge/pig iron) that has capacity for9,5 million tonnes/year , with estimation ofinvestment is about USD 1 billion.
Policy strategy :• Synchronization with the laws and
regulations.• Apply DMO regulation to fulfill local demand
of steel industry.
Rare Earth Minerals :Vanadium, Titanium
Added valuefrom ore tometal is 4 X
Problem :• There are big numbers of copper ore export in
2011 (14 thousand tonnes), that increases for800% compared to year of 2009 when Law No4 Year 2009 released.
• Capacity of local processing and refiningindustry (copper cathode) only absorbs about30% of total concentrate production.
• ±0,01% concentrate that has precious metalshas been processed outside the country.
Copper Ore Export (Million Ton)
Economic Impact:• Encourage local processing and refining
industry that process copper concentrate intocopper cathode with capacity 425 thousandtonnes/year with estimated investment aboutUSD 1,4 billion.
• Increase competitiveness of copperdownstream industry that produce wires, PCB,and another electronic components.
Policy Strategy :• Synchronization with the laws and
regulations.• Apply DMO regulation to fulfill local demand
of steel industry.
Rare earth minerals :Platina, Paladium,
Selenium, Telurium
Problem :• There are big numbers of bauxite ore export in
2011 (40 million tonnes) that increases for500% compared to year of 2009 when Law No4 Year 2009 released. This condition makesbauxite reserves will run out in only 4 yearsand this will not encourage local aluminaindustry.
Bauxite Ore Export (Million Ton)
Economic impact:• Encourage local processing and refining industry that
process bauxite ore into Alumina with capacity 7million tonnes/year, with estimated investment aboutUSD 8,4 billion
• Demand of Alumina from PT. INALUM in about 500thousand tonnes/year can be supplied locally.
Policy strategy :• Synchronization with the laws and
regulations.• Apply DMO regulation to fulfill local demand
of Alumina industry.
Rare earth minerals :Titanium, Tantalum,
Scandium, Lantanum,Yttrium)
Added valuefrom ore to
metal is 30 X
MAIN POINT OF MEMR REGULATIONNO. 7/2012II.
II.1. Mineral Added Value Procedures
II. MAIN POINT OF MEMR REGULATION NO.7/2012
Metallic Mineral
Rock Mineral
Non-Metallic Mineral
Processing
Processing
Refining
II.2. Implementation of Mineral Added Value
II. MAIN POINT OF MEMR REGULATION NO.7/2012 (Continued)
IUP OP
Own the Plant
Cooperation
Third-PartyIUP/IUPK OP
Processing andRefiningIUP OPK
SellingOre/Concentrate
Processing andRefining Activity
BuildInfrastructure
II.3. Implementation of Mineral Added Value
• IUP/IUPK Exploration due to feasibility study, is not profitable to do
processing and/or refining activity or can’t create a joint operation
project and/or cooperation, should consult to Director General.
• Based on the results of consultation, Director General can nominate
another IUP/IUPK Production Operation and/or IUP OPK Processing
and Refining to process and refine those commodities as long as meet
its specifications and its capacity.
II. MAIN POINT OF MEMR REGULATION NO.7/2012 (Continued)
Director General can facilitate IUP Production Operation, IUPK
Production Operation, and/or IUP OPK Processing and Refining to
accomodate ore/concentrate from another IUP Production Operation,
IPR, IUP OPK Transport and Sale that is not profitable to do their own
processing and refining activities, as long as meet its specifications
and its capacity.
IV.4. Implementation of Mineral Added Value(continued)
II. MAIN POINT OF MEMR REGULATION NO.7/2012 (Continued)
CURRENT CONDITIONIII.
Source: Geology Agency, 2010
III. 1. Mineral Metal Resources danReserves
III. CURRENT CONDITION
III.2.1. Status OF IUP (I,II,III, and IV announcement) - 31 May 2012 update
TOTAL IUP IUP C&C IUP NON C&C
10.361 4.496 5.865
IUP MINERAL COAL
TOTAL 2.688 1.808
TOTAL 4.496
III.2.2. Discription of IUP C & C of 31 May 2012
III.2.3. Discription of IUP Non C & C of 31 May 2012
IUP MINERAL COAL
TOTAL 4.015 1.850
TOTAL 5.865
III.2. STATUS OF IUPIII. CURRENT CONDITION (Continued)
III.2.4. Recapitulation of IUP Minerals Per Activity Phase (update 31 May, 2012)
NO IUP PHASE TOTAL IUP IUP C&C IUP NON C&C
1 EXPLORATION 2.879 1.090 1.789
2 OPERATION PRODUCTION 3.824 1.598 2.226
TOTAL 6.703 2.688 4.015
NO IUP PHASE TOTAL IUP IUP C&C IUP NON C&C
1 EXPLORATION 2.410 1.063 1.347
2 OPERATION PRODUCTION 1.248 745 503
TOTAL 3.658 1.808 1.850
III.2.5. Recapitulation of IUP Coal Per Activity Phase (update 31 May, 2012)
III. CURRENT CONDITION (Continued)
III.3. Recapitulation of Processing & Refining Plan Document(Update 31 May, 2012)1. PROCESSING & REFINING EXISTING : 7
COMPANY2. PROCESSING & REFINING PROPOSAL BEFORE MEMR REGULATION NO 7 YEAR 2012
: 24 COMPANY3. PROCESSING & REFINING PROPOSAL AFTER MEMR REGULATION NO 7 YEAR 2012
: 126 COMPANY
TOTAL : 157 COMPANY
III. CURRENT CONDITION (Continued)
III.4. Recapitulation of Consultation Request (update 31 May2012)No Request Amount
1 Certificate C&C Request 76
2 Certificate C & C that have been published 55
3 Requesting of Recommendation of Registered Exporter 156
4 Recommendation of Registered Exporter that have been published 46
5 Recommendation of Approval Export Letter that have been published 2
III. CURRENT CONDITION (Continued)
FOLLOW UPIV.
Minister of Trade Regulation No. 29/M-DAG/PER/5/2012 regarding Export
Mining Product Regulation (7 May, 2012)
MEMR No. 11 Year 2012 regarding Amendment of MEMR No. 07/2012
about Enhancement of Mineral Added Value Through Processing and
Refining Activity (16 May, 2012)
Minister of Financial Regulation No. 75/PMK.011/2012 regarding
Determination of Export Goods for the applied duty and duty tariff. (dated
16 May, 2012)
Director General Regulation No. 574.K/30/DJB/2012 regarding Procedures
and Requirement of Export Recommendation for Mining Product (11 May,
2012)
IV.1. Follow Up of MEMR No. 7/2012
IV. FOLLOW UP
In order to improve effectiveness of control implementation of sales mineral out of the country, need to
change regulation about enhancement of mineral added value through processing and refining
activity. Therefore at 16 May, 2012 Government has issued MEMR No. 11 Year 2012 regarding
Amendment of MEMR No. 07/2012 about Enhancement of Mineral Added Value Through Processing
and Refining Activity.
Main Point of MEMR No. 11 Year 2012 are between Article 21 dan Article 22 inserted 1 (one) Article,
namely Article 21A, as follows:
(1) IUP Operation Production Holder and IRP referred to in Article 21 can sell ore (raw material or
ore) minerals out of the country if has receiving recommendation from the Minister cq Director-
General.
(2) Recommendation reffered to in paraghraf (1) be given after IUP Operation Production Holder and
IPR reffered to in paraghraf (1) fulfil criteria such as :
a. status of IUP Operation Production and IPR are Clear and Clean;
b. Payment all financial obligation to the state;
c. submit a work plan and / or cooperation in processing and / or refining of minerals in the
country; and
d. signing the integrity pact.
IV.2. MEMR No. 11/2012
IV. FOLLOW UP (Continued)
REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER & EXPORTAPPROVALV.
1) copies of certificate C&C;
2) integrity pact;
3) memorandum of understanding with other IUP Operation Production or IUP Operation Production Special for processing
and refining if doing cooperation;
4) work plan establishment processing and refining facility own and/or cooperation processing and refining facility in the
country;
5) copies of sales contract of mining product with end user;
6) copies of Tax Payer Identification Number; and
7) copies of company registration mark.
IUP OP metallic mineral, non metal, rocks, with requirement :
IUP Operation Production Specially for transportation and sales of mineral, with requirement :
1) Copies of IUP Operation Produktion Specially for transportation and sales of mineral;
2) cooperation agreement with the IUP Operation Production holder has signed a integrity pact to build own processing
and refining facilities and / or who have had a memorandum of understanding with other IUP Operation Production or IUP
Operation Production Specially for processing and refining facilities to develop processing and refining facility in the
country;
3) copies of sales contract of mining product with end user;
4) copies of Tax Payer Identification Number; and
5) copies of company registration mark.
V.1. Requirement for Recommendation Registered ExporterRecognation
QREGISTERED EXPORTER
& EXPORT APPROVAL
1) copies of IUP Operation Production Specially for processing and refining;
2) work plan to developed processing and refining facility own and/or cooperation to developed
processing and refining facility in the country;
3) copies of sales contract of mining product with end user;
4) copies of Tax Payer Identification Number; and
5) copies of company registration mark.
Special IUP OP of processing and refining, with requirement:
V.1. Requirement for Recommendation Registered ExporterRecognation
V. REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER
& EXPORT APPROVAL (Continued)
1) copies of Registered Exporter of Mining Product;
2) export plan included are types and ammount of mineral commodities to be exported, tariff
number/HS, port loading, and export destination;
3) data of Resource, reserve dan production;
4) copies of sales contract of mining product with end user;
5) copies of provement of reclamation guarantee placement;
6) copies of provement of payment landrent/deadrent 1 (one) year last; and
7) Copies of provement of payment royalty of metallic mineral 1 (one) year last or proff of
payment tax level II for non-metallic mineral and rock in 1 (one) year last.
IUP OP metallic mineral, non metal and rocks, with requirement:
V.2. Requirement for Recommendation of Export Approval
V. REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER
& EXPORT APPROVAL (Continued)
IUP OP Specially for transportation and sales of mineral, with requirement:
1) copies of Registered Exporter of Mining Product;
2) export plan included are types and ammount of mineral commodities to be exported, tariff
number/HS, port loading, and export destination;
3) data of Resource, reserve dan production;
4) copies of sales contract of mining product with end user;
5) copies of work plan developing of processing and refining facility own and/or cooperation
developing of processing refining ini the country from IUP OP and/or IPR;
6) copies of provement of payment landrent/deadrent 1 (one) year last from IUP OP or IPR and;
7) copies of provement of payment royalty of metallic mineral 1 (one) year last or proff of payment
tax level II for non-metallic mineral and rock in 1 (one) year last from IUP OP or IPR.
V.2. Requirement for Recommendation of Export Approval
V. REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER
& EXPORT APPROVAL (Continued)
1) copies of Registered Exporter of Mining Product;
2) export plan included are types and ammount of mineral commodities to be exported, tariff
number/HS, port loading, and export destination;
3) copies of sales contract of mining product with end user;
4) Cooperating aggreement with IUP OP holder and/or IPR which has receive clear and clea
certificate
5) copies of provement of payment landrent/deadrent 1 (one) year last from IUP OP or IPR and;
6) copies of provement of payment royalty of metallic mineral 1 (one) year last or proff of payment
tax level II for non-metallic mineral and rock in 1 (one) year last from IUP OP or IPR.
IUP OP Specilly for processing and refining, with requirement :
V.2. Requirement for Recommendation of Export Approval
V. REQUIREMENTS FOR RECOMMENDATION OFREGISTERED EXPORTER
& EXPORT APPROVAL (Continued)
SOP ET RECOMMENDATION AND EXPORTAPPROVAL
Agenda CompanyIUP/IOP OPKNo. Director
GeneralDirector Small
teamPNT
Expertteam
1.
2.
3.
4.
Application
AdministrationEvaluation
TechnicalEvaluation
Recommendation Letter
AdministrationEvaluation
Complete?
No
Yes
Evaluation
Plenary
2014
Registration
Application
Notification :Data Complete
Notification :Data
Uncomplete
OriginalDocument
TechnicalEvaluation
Approval?
Official Memo& LetterConcept
DisapprovalLetter
Yes No
Official Memo& LetterConcept
Approval LetterHandover
recommendationletter
Handover letter ofdisapproval
There is an additional time between notificationand submission of original document
1
2
3a
3b
4
5
7b
7a
6
The issuance of Clean and Clear (CnC) certificate for the
company must meet the following requirements:
1. Administration :
a.No overlapping
b.Permit documents
2. Technical :
a.Exploration report
b.Feasibility study report
c.Environment document approval
3. Finace obligation :
a.Fixed contribution fee
b.Royalties
24 IUP
126 IUP
The Amount of IUP Mineral 5 Comodities CnC = 283 IUP
The Amount of IUP Mineral 5 Comodities NON CnC = 432 IUP
MERM MINISTERIAL REGULATION NO.07/2012
CLOSINGVI.
1. Some mineral commodities (ie nickel, bauxite, iron ore and sand iron and
manganese) mostly sold out of the country in ore formed (raw material / ore).
2. To ensure the sustainability of mineral processing and refining in the country
to the future, then absolute to control of mineral sales out of the country in
ore formed.
3. MEMR. 7/2012 become a strong legal basis for the Government to
encourage companies to increase value added through processing and
refining of mineral in the country.
4. Need the support of all stakeholders to realize increased value added
through the mineral processing and refining of mineral activity in the country
as mandated by Law No. 4/2009.
VI. CLOSING
Contact :
DEDE SUHENDRA
DIRECTOR OF MINERAL
DIRECTORATE GENERAL OF MINERAL AND COAL
Email :
Phone : 021- 8307557
fax : 021-83785103
Adress : Jl. Prof. Dr. Soepomo No. 10, Jakarta12870
www.djmbp.esdm.go.id