Mining is huge business in Indonesia and coal is the biggest export article. In this article I am going to share how to get the mining service licenses so that your company can be part of it.
First of all, let’s clarify what is coal and mining service. In essence, it’s offering services TO the coal and mining sector. Government has two classifications for that:
- Core mining business service
- Non core mining business
Depending on which classification your business falls under, we can determine which licenses you need. We’ll also look at the requirements to participate in the tenders.
Core mining business service
Core mining business covers the activities listed below.
Consulting, planning, implementation and testing of equipment in division of:
- Public investigation;
- Exploration;
- Feasibility Study;
- Mining construction;
- Transportation;
- Mining environment;
- After Mining Services and reclamation;
- Work safety and health.
Consulting, planning, and testing of equipment in field of:
- Mining;
- Processing and refining.
In order to run activities in those fields, you will need to obtain a license called IUJP (Izin Usaha Jasa Pertambangan). The application needs to be submitted to Directorate General of Mineral and Coal.
Depending on your location, you might need also approval from the governor or mayor of your regency. The license will be issued for 5 years.
Non-core mining service business
Every coal and mining service activity not listed in the list above is considered as none core activity. Government lists 38 non-core activites which you can see from the list here.
Non-core mining service companies need to acquire licenses called SKT (SURAT KETERANGAN TERDAFTAR).
Obtaining coal and mining service licenses
First of all, getting IUJP and SKT is not as difficult as you may have heard of. As long as you prepare all documents correctly, the process is straightforward and fairly easy.
There are several aspects you need to keep in mind to make the application process smooth.
Activity in the Articles Of Association
Regardless of whether you need IUJP or SKT, you will need to make sure the activity is listed in your Articles Of Association. If you have doubts, use the exact wording of the activities we have listed above. Your Article Of Association should read something like this:
Coal and Mining Service Business, specifically in: /enter your specific activity/
It is acceptable if your company has more than one activity listed, for example commonly companies in this industry also list trading and investment activities in the Articles Of Association.
Permanent business license
Obviously you will have to have your PT PMA and permanent business license (IUT) before you can start running activities in coal and mining service business. The thing to watch out for is that the permanent business license would list the same activities as your Articles Of Association.
Documents required for license application
In the table below find the documents that need to be prepared for obtaining either IUJP or SKT.
Those documents need to be submitted to Directorate General of Coal and Mineral. Keep in mind that the officials there are very rigid and will refuse your application for any minor mistake. So be prepared going to the directorate several times to fix any small errors. Having a consultant experienced in the process can therefore save a lot of time.
You can also read more from the 2009 (No. 28) Business Enforcement of Coal and Mining Service Regulations and its amendment 24/2012. Unfortunately we only have the Bahasa Indonesia version of them.
