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With regards to the new mining law and its draft regulations, there are certain points that are very interesting to talk about, such as divestment, domestic market obligation, and mine closure.
Every international mining company which 100% owned by non Indonesian entity has to divest minimal 20% shares after 5 years of production to Indonesian entity by direct ownership. Divested share price will be valued by the government before the production phase
There will be supervision by government for technology, services, engineering design utilization by mining companies to third parties (local or mining services company). The Draft of Energy and Mineral Resources Ministerial Decree will justify the supervision mechanism of services and engineering design utilization by mining companies to third parties.
Reclamation and mine closure plan have to be submitted prior before applying for Mining Operation and Production Permit. Reclamation plan will be made per 5 years. Mine closure issue now is an issue ready to be submitted to the Energy and Mineral Resources Department. The main difference right now, there is reclamation and mine closure bond. These bonds have to be approved by the Minister, governor, or the mayor depends on its authority. IUP or IUPK holders could put these bonds in a term deposit, warranty or insurance bank, or accounting reserve. These bonds have to cover all reclamation cost which is counted by third party. Minister, governor or mayor could appoint third party to execute reclamation plan by using reclamation bond. If the budget is not enough, IUP or IUPK holders have to allocate fund to the reclamation and mine closure budget.

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