On November 2, PT Arutmin Indonesia (Arutmin), a subsidiary of PT BUMI Resources Tbk, secured a 10-year permit extension over a concession in South Kalimantan from the Energy and Mineral Resources Ministry of the Republic of Indonesia. This permit was granted one day after its existing permit expired on November 1. The extension will go until November 1, 2030.
With the permit extension, Arutmin becomes the first of seven old mining giants to receive the legal certainty promised by the long-awaited Coal and Mineral Mining Law, which was issued in July.
“[This was] the answer to our hopes this entire time,” Bumi Resources President Director Saptari Hoedaja said. He added that the company was “committed to continue complying with applicable laws and regulations.”
The energy ministry is still working on three derivative government regulations related to commercialization, spatial planning and land reclamation in the mining industry. The deadline to issue the regulations is June 10, 2021. Lawmakers have admitted to pushing the law’s issuance to this year to protect the seven giants, whose existing permits — technically called coal contracts of work (PKP2B) — are slated to end between 2020 and 2025, starting with that of Arutmin, as reported by the Jakarta Post.
For state coffers, contract-based miners pay higher royalty rates than other miners. Arutmin will retain control over the concession, but its permit will change from a contract to a special mining permit (IUPK). Arutmin’s sister company, PT Kaltim Prima Coal, whose contract expires on December 31, 2021, is slated to undergo a similar extension process.