MAC: Mines and Communities

Indonesia cracks down on "illegal" small-scale miners

Published by MAC on 2011-08-23
Source: PlanetArk, Jakarta Post

But what about the bigger companies?

A curb on small-scale tin mining on Indonesia's Bangka and Belitung islands, announced in early August, has been strongly criticised by the general secretary of the Indonesian Tin Industry Association, Johan Murod.

Mr Murod claims that "[t]he government is not supporting the people for mining, they only support big companies". He says that, while "[a]ll mining causes environmental damage..  after the mining, we (too) can make environmental improvements with the right regulation."

There is some truth to Mr Mudo's statement. As pointed out on MAC earlier this year, the legacy of rampant tin mining in this region isn't solely due to illegal operators, but should also be placed at the door of global giant, BHP Billiton. See: Will BHP Billiton's shameful Indonesian mining legacy finally be addressed?

The mayor of Palu, in Central Sulawesi, last week also announced a "toughening" of  mining regulations to make the use of cyanide or mercury illegal among gold miners in the province".

Although directed at small scale miners, the legislation could theoretically be applied to nominally legal operators as well.

The biggest mining company in Palu is Citra Palu Minerals (CPM) whose Poboya gold project was previously controlled by Rio Tinto, then sold to Australia's Newcrest.

Citra Palu Minerals is now almost completely controlled by Bumi Resource Minerals (BRM) which is 87% owned by Bumi Resources, itself 32% owned by Bumi plc, listed in London.

Bumi Resources Minerals (BRM) also owns 24% of PT Newmont Nusa Tenggara (NNT) through its 75%-owned subsidiary, PT Multi Daerah Bersaing (MDB).

In a statement issued by JATAM, on 25 April 2002, the Jakarta-based mining advocacy group said: "Local NGOs and the communities in Poboya Forest Park have from the beginning rejected any mining plans in the area. Some local government officials are also against the plans... [Rio Tinto sold] its shares in PT CPM to Newcrest without any prior consultation with the local communities".

"The people of Palu and Poboya Forest Park have not been properly consulted about the use of their land, minerals and water resources... If the mine does go ahead, it will be the first mine close to an urban area and it will also be the first mine allowed in a Forest Park which is the customary land of the indigenous Tara and Ledo people (part of the Kaili ethnic group)".

Stop Crackdown On Small Tin Miners: Indonesia Industry

By Michael Taylor


12 August 2011

Indonesian police carrying out an environmental crackdown in the main tin producing region of Bangka island, should stop targeting small-scale miners as it is hindering domestic smelters' supplies, the Indonesian Tin Industry Association said.

Small-scale traditional tin miners in Indonesia, the world's top tin exporter, have slowed mining activity because they fear being raided by the police, who have been intensifying a crackdown on illegal miners for the past few months.

Small smelters in the island off Sumatra depend on traditional miners for between 70 and 80 percent of their ore supply.

"The police come and get the miners," said Johan Murod, general secretary at the association and director of Bangka-Belitung Timah Sejahtera, which groups five private tin smelters on Bangka island.

"It is because government regulation is not helping with the mining situation in Bangka island," he told Reuters this week.

The government brought in a new mining law in 2009 that restricts the operation of small-scale miners, who tend to operate in an undisciplined way, causing damage to the environment, and do not pay royalties.

A crackdown on illegal mining, tighter export regulations, declining onshore reserves and rain that had hindered production in Indonesia have helped drive the tin rally earlier this year.

"The government is not supporting the people for mining, they only support big companies," Murod added. "All mining causes environmental damage but after the mining, we (too) can make environmental improvements with the right regulation."

Bangka police follow up every complaint or report on illegal tin mining, which are made daily, and are committed to taking action against every mining violation, a spokesman said on Thursday.

Illegal small-scale miners who are caught by the police, are often not prosecuted, but instead shown mining areas that permit public mining, Bangka Belitung police spokesman Djoko Poernomo told Reuters.

"The police will continue to order prohibited activities or illegal activities which are against the law," he added. "This is not a seasonal action... many mining activities are being done at forbidden areas such as protected forest."

Bangka Output to Slip

Earlier this week, Indonesia's trade ministry said the country's refined tin exports rose 4.5 percent in July from the same month last year but were down almost 15 percent from last month.

Tin output in Bangka island will be 70,000 tonnes this year, compared with 80,000 tonnes last year, Murod said, as weaker tin prices hit output.

At 1:59 a.m. EDT, benchmark tin on the London Metal Exchange was at $23,500 a tonne versus $22,745 at the close on Wednesday. Tin struck a record high above $33,000 in April.

"Right now the smelters are waiting and seeing and do not buy tin," said Murod, whose association was established in 2009. "Right now, people are not mining because nobody (smelters) buys the tin because the LME price drops.

"At the moment, the LME price is due to speculation and not the real price," added Murod, speaking from Bangka island.

Murod forecasts more tin to come onto the market toward the end of this month however, as suppliers cash in ahead of the Islamic festival of Eid al-Fitr at the end of August.

He said however, that small-scale tin miners could be forced to cease operations if prices fall below $20,900 a tonne.

Southeast Asia's largest economy expects to produce 90,000 tonnes of refined tin this year, up from 78,965 tonnes in 2010, on expectations of improved weather conditions.

Indonesia's dry season started in most areas around May-June, the Climatology, Meteorology, and Geophysics Agency has said.

(Additional reporting by Dwi Sadmoko; Editing by Ramthan Hussain)

Environment Watch: Administrations Move to Save Regions from Mining Impact

By Ruslan Sangadji and Yemris Fointuna

Jakarta Post

12 August 2011

The Palu municipality, Central Sulawesi, has challenged critics, especially gold mine owners, over its policy on illegal mining activities in Poboya.

The administration has revoked two clauses in municipal regulations about mining, which have so far been the legal reference for thousands of gold miners in Poboya. Palu Mayor Rusdi Mastura said the revocation of the regulations was necessary because mining affairs had been handed over to the Central Sulawesi provincial administration.

"Sue me if you dare. I will definitely be there," Rusdi said Wednesday, in response to threats that he would be sued for his move. He said that the revocation was a form of his obedience as a mayor to the province's governor, who is his superior. "Besides, the municipal regulations are no longer advantageous."

Since mining activities have operated in Poboya, he said, the use of dangerous chemical agents are increasingly uncontrolled, causing environmental damage, and polluting water resources in the region.

"Who will assume responsibility when the use of mercury and cyanide has started to threaten the health of the Palu people?" he said. He said that to deal with the problem, there was no other way but to put an end to the mining activities and tell the miners to leave the area. Otherwise, stern action will be taken, as they will be considered illegal miners.

Separately, Central Sulawesi Police chief, Brig. Gen. Dewa Parsana, said that a familiarization team concerning the closure of mining sites had been deployed to inform people not to continue their mining activities in Poboya.

The measure was taken following the issuance on Monday of Central Sulawesi Governor Decree on curbing illegal logging activities in the subdistricts of Poboya, Kawatuna and Lasoani in Palu. Dewa said the miners were given until Sept. 3 to obey the instruction. Meanwhile, in Kupang, East Nusa Tenggara (NTT), Governor Frans Leburaya has sent a survey team to investigate a report on alleged gold exploration activities by PT Fathi Resources inside the Laiwanggi Wanggameti National Park in Pinupahar district, East Sumba regency.

"If the team finds any indication of exploration activities, PT Fathi should obtain a permit from the Forestry Minister before resuming its operations," Frans said, Thursday. Separately PT Fathi Resources executive director Ahmad Chandra said that the allegation was not true, as the license issued for his company was for an area outside the national park. "We have a mining site of 99,000 hectares that are located outside the protected forest," he said.

He added that drilling activities were done manually and did not involve the use of heavy equipment or dangerous chemical agents that are hazardous to the environment. "We have 41 drilling spots. None of them are inside the national park," he maintained.

Meanwhile, an official report issued on Thursday by the NTT branch of the Indonesian Environment Forum (Walhi) indicated that there had been massive logging inside the park. "This will influence the protected flora and fauna, including the tropical endemic birds," the branch's program manager, Hery Naif, said.

He said that the 47,014-hectare Wanggameti national park was located in the middle of PT Fathi's 346,500-hectare mining site located in the four regencies of East Sumba, West Sumba, Central Sumba and Southwest Sumba.

This, according to Hery, violates a 2009 circular issued by the Energy and Mineral Resources Ministry, which stipulates that drilling activities should be conducted at a minimum distance of 500 meters from the outermost border of the national park. "In fact, they are located just a few meters away from the border line," Hery said.

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