Indonesia to audit 8,000 mining permits after new laws

Reuters 23 May 11;

May 23 (Reuters) - Indonesia will audit over 8,000 existing mining permits to make sure they are in line with mining and environmental laws, the country's finance minister said on Monday, days after the country passed new regulations on environmental protection.

President Susilo Bambang Yudhoyono last week signed a two-year moratorium on permits for logging and another decree allowing underground mining in protected forests if conditions such as an environmental assessment had been met. [ID:nL4E7GK0I2]

The rules were softer than expected by environmentalists and it was not clear if the audit of permits would lead to any cancellations. Indonesia had already stopped issing new mining permits ahead of mining regulations stemming from a 2008 law.

"There are many overlapping permits, and permits where it needs to be confirmed whether they are in line with mining practices in term of protecting the environment," said Finance Minister Agus Martowardodjo.

Higher commodity prices are attracting increased investment interest in mining metals such as nickel in Indonesia, despite red tape, poor infrastructure and corruption.

But the severe bottleneck in mining licence issuance threatens further development of Indonesia's resources, executives have said. [ID:nSGE69D0C6]

Global miners with projects in Indonesia include Newmont Mining Corp , Freeport-McMoRan Copper & Gold and BHP Billiton . Indonesia is the world's top exporter of thermal coal and tin. (Reporting by Rieka Rahadiana and Adriana Nina Kusuma; Writing by Telly Nathalia; Editing by Neil Chatterjee)

Geothermal Mining Allowed in Forests
Fidelis E Satriastanti Jakarta Globe 22 May 11;

Keen to develop clean energy, Indonesia is now permitting underground mining in protected forests to help harness the power of the earth, a senior official said on Friday.

A new presidential regulation would allow greater geothermal development because 80 percent of geothermal reserves were found beneath protected forests or national parks.

“The regulation is much awaited as it will pave the way for us to develop our geothermal potential,” Cabinet Secretary Dipo Alam said on Friday.

Currently, the country is the third-largest producer of geothermal power, but the five existing plants contribute only 1.5 percent of the nation’s power generation capacity.

The state goal is 25 percent renewable power by 2025 along with 23 percent natural gas, 30 percent oil, and 22 percent coal. Geothermal, hydropower and bio-energy are the flagship sources in the new policy.

A presidential regulation signed on Thursday stated that underground mining could be conducted in protected forests areas so long as it did not change the general use and purpose of the area.

Experts have argued that in underground mining there is no immediate alteration to the above-ground landscape because operators usually only build tunnels to reach the geothermal energy sites. The long-term effects are still in question.

The regulation stipulates that underground mining activities must first get a permit in principle from the minister of forestry and follow up with a permit for the use of protected forest areas.

An Environmental Impact Analysis (Amdal), issued by the Ministry of Environment should also be attached to the application for the permit.

Miners Say Protected Forests Fair Game
Fidelis E. Satriastanti Jakarta Globe 23 May 11;

The mining industry pointed out on Sunday that a much ballyhooed presidential decree allowing geothermal exploration in protected forests also allowed underground mining, including delving for minerals and coal.

Irwandy Arif, chairman of the Indonesian Mining Professionals Association, said that the decree signed by the president on Thursday referred to underground exploration, which could extend to resource mining.

“We’ve been waiting for this presidential regulation, especially for mining lead in Dairi, North Sumatra,” he said.

He added the country’s open-pit mines were increasingly exhausted, so there was little choice but for miners to go deeper.

“The regulation gives legal certainty and will attract miners to invest more in silver, lead and gold mining,” said Irwandy, who helped draft the presidential decree over the past three years.

Under the decree, signed on Thursday by President Susilo Bambang Yudhoyono, resource exploitation in protected forests is allowed as long as it is underground, it did not change the general use and purpose of the area, and the operators include infrastructure that supports production activities in the protected areas.

To qualify for a permit, applicants must provide as compensation land that is twice the area of the concession they are seeking to exploit. They are also obliged to replant and rehabilitate affected river catchment areas of the same size as their concession.

The permits are valid for 20 years and may be extended.

Irwandy said that while 90 percent of mining in Indonesia was of the open-pit variety, there were already several underground mines in operation, such as gold mines run by state-owned miner Antam in Pongkor, West Java, and Cibaliung, Banten.

“There’s also an underground coal mine run by Tambang Batubara Bukit Asam in Sawahlunto, West Sumatra, while Freeport is also carrying out underground mining,” he said.

“Newmont has said it too will conduct underground mining.”

Hadi Daryanto, the Forestry Ministry’s secretary general, said underground mining resulted in less environmental degradation than open-pit mining, adding that while there would be some damage but it would be strictly controlled.

He said permission for underground mining would only be given in the case of protected forests, and not for conservation forests, national parks or nature reserves.

However, Abadi Purnomo, chairman of the Indonesian Geothermal Association (API), said 30 percent of the country’s geothermal reserves were found in nature reserves, while another 30 percent was in protected forests.

“For protected forests, there are already several regulations stating that exploration is allowed as long as it’s not open-pit mining, but not for nature reserves, national parks and conservation areas,” he said.

He added that geothermal exploration should not be considered mining because “it’s actually just extracting heat from groundwater, which is different from digging for mineral resources such as gold.”

“It’s also environmentally safe because we need trees to maintain the heat sources [to preserve the groundwater], and we only use up 0.001 percent of the total forest area just to install the pipes and infrastructure,” Abadi said.