Indonesia ‘Working to Reopen’ Closed Mine

Jakarta Globe 15 Feb 10;

The government is trying to resolve a land-permit problem that has resulted in the closure of a coal mine in Kalimantan owned by Thai coal miner Banpu.

Last week, police temporarily closed the Jorong coal mine in South Kalimantan because it does not have a valid permit.

“We are holding talks at the Coordinating Ministry for the Economy on how to settle this issue,” Bambang Setiawan, director general of coal, minerals and geothermal at the Energy Ministry, said on Monday.

Bambang said the owners of the Jorong mine had already put in a request to the Forestry Ministry to extend its permit, but one had not yet been issued.

“Because of a need to continue production, the producer went on operating without the extension permit,” he added.

Banpu confirmed in a statement last Thursday that operations at the mine had been shut but said it would only have a slight impact on production at its Indonesian unit — PT Indo Tambangraya Mega.

“The stoppage was [caused] mainly by the overlapping of related regulations from different ministries,” Indo Tambangraya said last week.

Indo Tambangraya has six coal mining concessions in Indonesia, including Jorong.

Another official at the Energy Ministry said problems like this over land permits could hit mining output by increasing investor uncertainty regarding the industry in Indonesia.

“Indonesia needs more coal to supply coal-fired power plants, especially in Java from this year,” said the official, who declined to be identified.

“If there are many of these type of problems in the sector then it will cut coal production in future,” the official said.

The Jorong mine produces sub-bituminous coal, which is supplied to local power plants as well as being exported.

According to estimates from Indo Tambangraya, the Jorong mine produced 2.85 million tons of coal in 2009, with 2.3 million tons targeted at the overseas market.

The company said it did not know when it would be able to resume operations.

Forestry Minister Zulkifli Hasan said on Jan. 10 the ministry had revoked the land use permits for 23 mining and other firms operating in forested areas.

Zulkifli said at the time the ministry might crack down further as it took a tougher stance on environmental protection.

However, the government has also pledged to resolve bottlenecks and other bureaucratic obstacles that frequently hamper investment projects and have discouraged foreign investment in the country’s mining sector. Reuters