Mining industry in Indonesia burdened by overlapping claims
Thursday, 7 June 2007
MANILA, June 6 (AFP): Indonesia's mining sector offers huge potential for growth but must first overcome challenges such as overlapping claims and uncertainty over a pending industry bill, a miners conference heard today.
The conference was told that no new contracts for mining projects in Indonesia had been issued since 2001 as foreign investors "are waiting for the new (mining) law," said Raden Sukhyar, assistant to Indonesia's minister of energy and mineral resources.
Speaking at the 7th Asia Pacific Mining Conference in Manila, he said there was optimism about the sector, citing the growing demand for Indonesia's mineral resources as well as the prospect of an improved regulatory system.
He said that although no new contracts had been issued since 2001 some 1,200 "mining authorisation" permits had been issued for small-scale projects.
This has led to problems with large companies finding their mining areas covered by conflicting claims under the mining authorisation permits.
Arif Siregar, director of PT Inco, which operates a mine in Sulawesi, said his company was paying high royalty taxes to both the local and national government.
He said there were "overlaps of power between the central, regional and local governments" which complicated matters.
Siregar said that before 1998, a mining company only had to deal with two departments in the capital.
"Now, instead of two stakeholders, you have hundreds of stakeholders," he said, citing non-government organisations, the departments of energy and environment and other government agencies. Sirgar recalled that his company had been "fighting with the forestry ministry for two to three years" because of regulations supposedly banning mining in certain forests.
He recalls telling them: "I can create forests but I cannot move minerals."
Tony Wenas, vice-president of PT Freeport Indonesia, a subsidiary of US giant Freeport McMoran, recalled that in their mine in West Papua, Indonesia, his company was forced to allocate one per cent of its gross revenues to civic projects in order to placate local residents.
The conference was told that no new contracts for mining projects in Indonesia had been issued since 2001 as foreign investors "are waiting for the new (mining) law," said Raden Sukhyar, assistant to Indonesia's minister of energy and mineral resources.
Speaking at the 7th Asia Pacific Mining Conference in Manila, he said there was optimism about the sector, citing the growing demand for Indonesia's mineral resources as well as the prospect of an improved regulatory system.
He said that although no new contracts had been issued since 2001 some 1,200 "mining authorisation" permits had been issued for small-scale projects.
This has led to problems with large companies finding their mining areas covered by conflicting claims under the mining authorisation permits.
Arif Siregar, director of PT Inco, which operates a mine in Sulawesi, said his company was paying high royalty taxes to both the local and national government.
He said there were "overlaps of power between the central, regional and local governments" which complicated matters.
Siregar said that before 1998, a mining company only had to deal with two departments in the capital.
"Now, instead of two stakeholders, you have hundreds of stakeholders," he said, citing non-government organisations, the departments of energy and environment and other government agencies. Sirgar recalled that his company had been "fighting with the forestry ministry for two to three years" because of regulations supposedly banning mining in certain forests.
He recalls telling them: "I can create forests but I cannot move minerals."
Tony Wenas, vice-president of PT Freeport Indonesia, a subsidiary of US giant Freeport McMoran, recalled that in their mine in West Papua, Indonesia, his company was forced to allocate one per cent of its gross revenues to civic projects in order to placate local residents.