16 foreign mining firms suspends operations

At least 16 foreign companies mostly from Canada and Australia have postponed their exploration activities due to uncertainty in the security and prices of the mining products, Tempo Interaktif and The Jakarta Post reported on Tuesday.

Simon Sembiring, the director for mining development at the Ministry of Mines and Energy, said on Monday that some of the mining companies, which obtained their contracts to explore and produce mineral resources other than coal, quit their operations because uncertainty in ithe security seasons.

Some others cancelled their mining projects due to uncertainty of the prices of the mining products and the financial difficulties suffered by their parent companies, Simon said.

Gold mining operator PT Kuta Raja which had a mine concession in the troubled province of Aceh, for example, pulled out due to continued armed conflicts between the military and the pro-independence movement in the province.

The delay in the mining projects would result in the sharp drop in the investment spending in the mining sector, he said, adding that a mining firm mostly spends between US$5 million and $10 million in exploration activities a year.

According to Simon, some of the companies also quit their operation because their mine areas overlapped with protected forests. (*)