Obligation for Processing and Refining of Mineral

Mining Commodities
The terms Added Value is used in the Government
Regulation No. 23 Year 2010 as amended by the
Government Regulation No. 24 Year 2012 as well as under
the Regulation of the Minister of Energy and Mineral
Resources No. 7 Year 2012 on Added Value of Mineral
Through Processing and Refining as amended by
Regulation of the Minister of Energy and Mineral Resources
No. 11 Year 2012. It refers to the value of mineral as a
result of the process carried out on the mineral.
Further those regulations stress on the terms Increase in
the Added Value which means an increase in the value of
the mineral which contributes to the economic, social and
cultural benefits.
With the principle of increase in the added value for the
economic, social and cultural benefits, the holder of IUP
for Production Operation / IUPK for Production Operation is
obliged to carry out the processing and/or refining of the
mining products within the country (Indonesia), for certain
metal mineral. While for certain non-metal mineral and
rocks, to carry out the processing of the mining products
within the country.
The regulations stipulate that the types of mineral
commodities which values may be added are:
Metal minerals
Non-metal minerals
Rocks
The regulations further state that the added value to the
mining commodities is implemented through the following
activities:
1.processing and/or refining of certain metal mineral
mining commodity

2.processing of certain non-metal mineral mining

commodity; and
3. processing of certain rocks mining commodity.
Determination on certain metal mineral mining
commodity, certain non-metal mineral mining commodity,
and certain rocks mining commodity is set out in the
Regulation of the Minister of Energy and Mineral
Resources.
Each type of certain metal mineral commodity as
stipulated in the Minister Regulation shall be processed
and/or refined in accordance with the minimum limit of
processing and/or refining as prescribed in the attachment
to the Minister Regulation.
Each type of certain non-metal mineral commodity, and
rocks commodity as stipulated in the Minister Regulation
shall be processed in accordance with the minimum limit
of processing as prescribed in the attachment to the
Minister Regulation.
Further, under Article 5 of the Regulation of the Minister of
Energy and Mineral Resources No. 7 Year 2012, the side
products or residual of the processing and/or refining of
the metal mineral commodity shall also be processed
and/or refined within the country (Indonesia) in
accordance with the minimum limit of processing and/or
refining the metal mineral commodity as prescribed in the
attachment to the Minister Regulation.
With respect to the non-metal mineral commodity, the
side products or residual of the processing which still
contains elements or metal mineral with economic
benefits shall also be processed within Indonesia in
accordance with the minimum limit of processing and/or
refining the metal mineral commodity as prescribed in the
attachment to the Minister Regulation.

The processing and/or refining of the mining product

produced by the holder of IUP Production Operation / IUPK
Production Operation may be conducted directly or
through cooperation with other holder of IUP Production
Operation / IUPK Production Operation, or with the holder
of IUP Production Operation Specially for Processing and/or
Refining.
With an approval of the Director General on behalf of the
Minister, the cooperation with other holder of IUP
Production Operation / IUPK Production Operation, or with
the holder of IUP Production Operation Specially for
Processing and/or Refining may be in the form of:
a. Buying and selling ore or concentrate;
b. Activities to do processing and/or refining; or
c. Joint development of facilities and infrastructure for
processing and/or refining.
Accordingly, certain metal mineral mining commodity
including the side product/residual/associated mineral,
non-metal mineral, and rocks that are to be sold abroad
shall meet the minimum limit of processing and/or refining
of certain mineral mining commodity.

Said, Sudiro & Partners

Indonesian Attorneys at Law
Sampoerna Strategic Square
South Tower, Level 18
Jl. Jend. Sudirman Kav. 45 - 46
Jakarta 12930 Indonesia
Phone: (62-21) 575.0983
Fax: (62-21) 575.0803
Website: www.ssplegal.com
www.saidsudiro.webs.com
www.saidsudiro.weebly.com
Emails: mail@ssplegal.com
sdsdp@cbn.net.id
P.O. BOX 8211 JKS.SB
Jakarta 12920