INTERVIEW - Indonesia seeks solution on open-pit mining ban
Date: 19-Apr-02
Country: INDONESIA
Author: Muklis Ali
"This is one of the big issues in the eastern part of Indonesia. Many governors and regents have called me and ask what is the solution because mining is one of the potential revenue (sources) for the region," Kaisiepo told Reuters in an interview this week.
Recently passed Indonesian forestry law bans open-pit mining deemed to be a danger to forests, which the statute defines in a way that would apply it to virtually all existing and proposed open-pit operations in the country, according to industry sources and some government officials.
While thus far the statute has not generally been enforced, concerns about it have caused several prospective foreign mining investors to withdraw from Indonesia or hold back on development plans, the sources say.
Mining companies that already have long-term contracts with the government would also be hit.
Wimpy Tjetjep, director general of geology and mineral resources, has said that because of the new forestry law 50 firms with current mining contracts would require parliamentary action to allow them to continue operating legally. The firms comprise foreign and local companies involved in coal, nickel and gold mining.
Copper and gold miner PT Freeport Indonesia, a subsidiary of U.S.-based Freeport McMoran Copper & Gold Inc and gold miner Newmont Nusatenggara, a unit of Denver-based Newmont Mining Corp are among the 50 companies.
Nickel producer PT International Nickel Indonesia and nickel and gold producer PT Aneka Tambang are also on the list.
"This is a very contradictory. On one hand we need foreign investors but on another hand we make a rule that causes investors to stay away from Indonesia," Kaisiepo said.
Kaisiepo said there would be a meeting between Forestry Minister Muhammad Prakosa, Mines and Energy Minister Purnomo Yusgiantoro, Environment Minister Nabiel Makarim and a parliament commission, probably next month, to seek a solution.
"We have already had informal meetings but there are still differences among officials," Kaisiepo said.
Kaisiepo said eastern Indonesia still had significant potential in mining of coal, nickel and gold.
"We have still have large deposits of those commodities... foreign investors are still interested but the law on forestry has caused them to take a wait and see attitude," he added.
Mining and its lucrative revenues are one of the key areas in which provincial and district administration have been given greater control under new autonomy rules in Indonesia.
Kaisiepo said security was not a big issue anymore in Eastern Indonesia and the provincial authorities were ready to reduce unnecessary taxes and other burdens on investors.