Mining In Indonesia – Mining Rights And Title

The Constitution stipulates that Indonesia's natural resources are controlled by the state and must be used for the maximum benefit of the Indonesian people. Article 4, paragraph 2 of Law 4/2009 on Coal and Mineral Mining (Law 4/2009) enables the central government or the regional government to exercise control over mineral mining activities. However, the draft Amendment to Law 4/2009 (the Mining Law Amendment) eliminates the authority of regional governments to exercise control over minerals, with this authority to be held exclusively by the central government.

The government has the authority to grant certain private parties mining permits (IUPs) to conduct mining activities. An IUP does not grant ownership of the minerals in the ground. Ownership of the minerals is transferred from the government to the IUP holder once the royalty payment has been settled.