A series of sanctions for mining companies to build smelters late

Jakarta, Armfalcon.com —

The government sets a series of sanctions and fines for companies mine late to build processing and refining facilities (smelters). Sanctions also apply to companies that get extensions export raw materials until 2024.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the sanctions and fines were stipulated in the Ministerial Decree (Kepmen) of ESDM No. 89 of 2023 concerning Guidelines for Imposing Administrative Fines for Delays in Construction of Domestic Metal Mineral Refining Facilities which took effect on May 16, 2023.

The first sanction is the placement of a guarantee guarantee of 5 percent of total sales for the period 16 October 2019 to 11 January 2022 in the form of a joint account (escrow account).

“If on June 10, 2024 90 percent of the target (smelter construction) is not reached, then the guarantee will be deposited to the state treasury,” Arifin said in a working meeting with Commission VII DPR RI on Wednesday (24/5).

The second sanction is the imposition of an administrative fine for delays in refining facilities of 20 percent of the cumulative value of overseas sales for each period of delay taking into account the impact of the COVID-19 pandemic.

The placement of this fine must be deposited to the government no later than 60 working days after the Ministerial Decree 89/2023 takes effect.

The third sanction set by the government is that companies holding IUP/IUPK who are still exporting during the extension period will be subject to fines which are further regulated by the Ministry of Finance through a Minister of Finance Regulation (PMK).

Based on ESDM data, there are at least five companies that will be given an extension on the export of raw materials subject to sanctions and fines, namely PT Freeport Indonesia, PT Amman Mineral Industri, PT Sebuku Iron Lateritic Ores, PT Kapuas Prima Coal, PT Kobar Lamandau Mineral.

Previously, the government had regulated that raw mineral exports would only be allowed in June 2023, so companies had to build smelters. This is stated in Law Number 3 of 2020 concerning Mineral and Coal Mining (Minerba Law).

However, over time, many IUP/IUPK companies have not completed the construction of their smelters due to several obstacles, one of which is the COVID-19 pandemic. Therefore, they were given an extension for one year until June 2024, with the consequences of being subject to sanctions and fines.

“So the construction of these smelters can all be completed in 2024,” concluded Arifin.

[Gambas:Video CNN]

(ldy/sfr)