MAC: Mines and Communities

13 mining sites get forest status changed

Published by MAC on 2003-11-06

13 mining sites get forest status changed


November 06, 2003

Despite reports in the Indonesian media to the contrary recently, the Coordinating Ministry for Economics confirmed in Jakarta Wednesday (November 5) that the government will soon issue a presidential decree (Kepres) changing the status of forest lands in 13 contracts of works from protected to non-protected forest to allow mining development and production activities to resume.

Nearly 5 years after the implementation of Forestry Law No 41/1999 that banned open cut mining operations on land classified as protected forest.

Reports in the Kompas daily Wednesday indicate the government decided to allow 13 of the 22 to proceed after legal advice that it could be sued for up to US$31 billion for its decision to allow the Forestry Law in 1999 to effectively and retrospectively extinguish approved Contracts of Work hedl by foreign companies to develop and mine mineral and coal resources.

Last year the Ministry of Energy and Mineral Resources proposed that 22 mining companies be allowed to resume their operations. The 13 mining companies awarded business permits by a limited coordination meeting have determined a viable mineral resource within their contracts of work (COW).

This decision will be discussed in cabinet meeting headed by President Megawati Soekarnoputri planned for Thursday (November 6). "The plan was this meeting held on Thursday. This decision will be delivered once more to the House of Representative (DPR). Soon after the DPR approval, the decree will be issued," said a member of the Department Energy and Mineral Resources legal team in Jakarta on Tuesday (November 4) as quoted from Bisnis Indonesia daily.

Actually all technical ministers, Minister of Energy and Mineral Resource, Minister of Internal Affairs, Minister for the Accelerated Development of East Indonesia, and the Minister of Environment, along with the coordinating Minister for Economics have agreed to the proposal for 22 mining companies to be granted permits to resume activities.

There was an objection from a key institution, the Department of Forestry, because the 22 companies kept changing their name reflecting new partnerships and investors over the recent years.

Meanwhile, Bisnis Indonesia reported that the Minister for Coordination of the Economy, Dorodjatun Kuntjoro-Jakti is scheduled to report to President Megawati Thursday regarding the decision on the issue of overlapping regulations concerning the use of protected forestlands. Only 115,118 hectares from a total 6,054,175 hectares of protected forest surrounding the mining areas will undergo a change of status.

A copy of the official decision of the Limited Coordination Meeting obtained by Bisnis Indonesia confirmed the approval of 22 mining companies, (13 were approved and 9 are continued) selected to continue their activities within protected forest zones and outlined the procedure to ratify the decision. The meeting also agreed to the mechanism and process of resolving the overlapping regulations as first proposed in a meeting on 18 July 2003.

The agreement will be delivered to the President through the Minister for Coordination of Economics to obtain an instruction for approval from the parliamentary House of Representative (DPR) Commission VIII and III before the Presidential Decree is issued.

An integrated inter-departmental team established to study the submissions by mining companies and the DEMR to resume operations delivered its report, and the criteria used for selection of mining companies recommended for approval.

Mining companies must meet the following criteria if their applications to resume operations and change the status of forestland use within their COWs are:

+The company has conducted exploration programs
+The company has delineated an economic mineral (or coal) resource and defined the plant or processing area required
+The company must have determined the investment or capital cost of the operation
+The company must contribute and provide benefits to local communities and regional development
+The company must have the support of the regional government.

The limited coordination meeting decision was that the 13 companies prioritized for approval are: PT Freeport Indonesia, PT Karimun Granit, PT Inco Tbk, PT Indominco Mandiri, PT Antam Tbk (Buli-Malut), PT Natarang Mining, PT Nusa Halmahera Minerals, PT Pelsart Tambang Kencana, PT Interex Sacra Raya, PT Weda Bay Nickel, PT Gag Nikel, PT Sorikmas Mining, and PT Antam Tbk (Bh Bulu Sultra).

The other nine companies considered to have good potential to continue their activities are: PT Newmont Nusa Tenggara, PT Sungai Kencana, PT Irja Eastern Mining, PT Kalimantan Surya Kencana, PT Nabire Bakti Mining, PT Dairi Prima Mineral, PT Newmont Horas Nauli, PT Maruwai Coal, and PT Sumbawa Timur Mining.****

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