Obligations to entrepreneurs holding Mining Business Permits and Special Mining Business Permits are not allowed to transfer their permits, required to submit reclamation plans and post-mining plans, apply good mining engineering principles, manage finances in accordance with the Indonesian accounting system, increase the added value of mineral and coal resources, carry out development and empowerment of local communities, comply with the tolerance limits of environmental carrying capacity, and divestment obligations to business entities holding Mining Business Permits and Special Mining Business Permits whose shares are owned by foreigners.
The divestment obligation as regulated in Article 112 of the Law of the Republic of Indonesia Number 4 of 2009 concerning Mineral and Coal Mining, after the Law of the Republic of Indonesia Number 4 of 2009 concerning Mineral and Coal Mining changed with the issuance of Law of the Republic of Indonesia Number 3 of 2020 concerning Mineral and Coal Mining. The state's efforts in realizing prosperity in the mineral and coal mining sector are still being carried out, one of which is divestment.
Divestment arrangements in the Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 84 K/32/MEM/2020 concerning Guidelines for the Implementation of Bidding, Evaluation, and Calculation of Divestment Share Prices in the Mineral and Coal Mining Sector
There are two parties as to the subjects of divestment of foreign shares in the mineral and coal mining sector in Indonesia. They are foreign investors who have shares of more than fifty-one percent ownership in the mineral and coal mining sector, as sellers and participating parties from Indonesia as a buyer. The first bid submission was made in stages to the Central Government, namely through the Minister, and for this first divestment submission, no time limit was given.
Holders of Mining Business Permits, Special Mining Business Permits, as well as Contracts of Work and Coal Mining Concession Work Agreements, may submit a share divestment offer to the Government through the Minister by submitting a share divestment offer letter signed on stamp duty by the board of directors of a business entity. It contains the amount of the divested shares required that will be sold and the share price is divested. Then, foreign investors who wish to divest their shares can complete the documents that have been determined, including:
List of the composition of the board of directors and commissioners, along with the identity and identification number of the taxpayer and/or tax identity;
List of shareholders up to the final beneficiary (beneficial ownership);
Document for calculating the price of divested shares in accordance with the offering letter as referred to in the discounted cash flow which at least contains data: approach and method of investment analysis, valuation assumptions, investment costs, mining costs, depreciation and amortization, financial projections, application of discounts and premiums;
Resource and reserve balance data that has been verified by a competent person;
Feasibility study documents that have been approved;
Environmental documents that have been approved; and
