Risk of terminated or revoked coal mining rights by the Government
2. Risk of new legislation enactment whether in the field of mining, environment, seaport, shipping, finance, forestry,
as well as in other fields or there might be an interpretation or implementation of such legislation which
can negatively impact business activities and licensing owned by the subsidiaries.
The Company
and its
Subsidiaries requires
permits and
approvals other than PKP2B and IUP, to run its business. The Company cannot confirm the possibility of changed regulations
relating andor affecting the mining industry in Indonesia in the future. Changes of legislation limiting mining operations
in the concessions territory including those that cause failure of the Company in obtaining permits and renewal of
approvals could adversely affect the financial condition, results of operations and business prospects of the Company
and its subsidiaries. In the environmental sector, BIB is the holder of
Environmental Impact Assessment AMDAL for the implementation of mining activities in the area of PKP2B, and the holder of
Environmental Management and Monitoring Plan UKL-UPL for the implementation of special port activities which is in the
process of evaluation within the framework of the Mandatory Environmental Audit in accordance with Article 49 paragraph 1
Law No.32
Year 2009
on Environmental
Protection and
Management. KIM, KCP, TBBU, BBU, BHBA, BNP, MAL, NIP and TKS
are AMDAL andor UKL-UPL holders for the implementation of mining activities in each IUP area. The AMDAL and UKL-UPL
might be evaluated in the framework of Mandatory Environmental Audit, which enable subsidiaries to renew AMDAL and UKL-UPL,
which has been owned. Termination or revoked or limitation of AMDAL andor UKL-
UPL with respect to the results of evaluation in the framework of Mandatory Environmental Audit may cause negatif impacts on
the business activities, financial condition, results of operations and business prospects of the Company.
3. Risk of dependence on the ability of subsidiaries to obtain, maintain and renew all permits and approvals
required.
The Company requires various permits and approvals from central and local government agencies to conduct mining
operations that include general business permits, mining
permits, investment permits, labor permits, compliance to environmental provisions, land utilization permits, forestry
permits and other permits. Most of these permits have varying
expiration from 6 months up to 30 years from the date of issuance of such permits. Thus, the Company must renew each
permits and approvals when it is expired and obtain new permits and approvals if necessary. The Company cannot ensure
that the Government either central or local level will issue
or extend the permits and give approvals in estimated time period. Negligence or failure to obtain or extend any permit
or approval required for the Companys operation could be materially
detrimental to
business activities, financial conditions, results of operations and prospects of the
Company.