DIGIVESTASI - President Joko Widodo (Jokowi) signed a new regulation regarding the extension of the Special Mining Business Permit (IUPK) contract for PT Freeport Indonesia. This regulation is contained in Government Regulation (PP) Number 25 of 2024, which amends PP Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities.

The extension of Freeport's contract is regulated in articles 195 A and 195 B. These articles state that an IUPK for Production Operations is an IUPK as a continuation of a Contract/Agreement Operation.

Article 195 B, paragraph 1, outlines the conditions for extending the IUPK Production Operation contract, including having integrated processing and/or refining facilities within the country, the availability of reserves for the operational needs of these facilities, and a minimum of 51% of shares owned by Indonesian participants.

Other requirements include entering into a new non-dilutive share purchase agreement of at least 10% of the total shares to a state-owned enterprise (BUMN), considering increased state revenue, and committing to new investments, at a minimum in the form of further exploration activities and increased capacity of refining facilities as approved by the minister.

"The extension referred to in paragraph (1) is granted as long as reserves are available and is evaluated every ten (10) years," the regulation states.

Applications for extension of the permit referred to in paragraph 1 must be submitted to the minister no later than one year before the end of the Production Operation period.

Applications for extension of the permit must be accompanied by a letter of application, a map and boundary coordinates of the area, and proof of payment of fixed fees and production for the past three years.

In addition, reports on production operation activities up to the extension application, environmental management implementation reports, RKAB (Work Plan and Budget), as well as resource and reserve balance sheets are required.

Paragraph 5 explains that the minister will grant the extension of the permit based on an evaluation of the fulfillment of the above criteria and the performance of Production Operations, with a decision given before the permit expires.

The minister also has the right to reject the extension application based on the evaluation results. Rejection must be communicated to the permit holder before the permit expires with clear reasons for the rejection.

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