Antam, BHP given greenlight to continue Gag nickel project

Publicly listed state owned mining company PT Antam said the government had given green light for it and its Australian partner BHP Ltd to continue the nickel project on Gag Island, in Irian Jaya.

"Major hurdle for the project has been resolved," Antam's president Dedy Aditya Sumanegara recently told Petromindo.Com.

The project, which is now under feasibility study, was halted following the issuance of the Forestry Law No. 41/1999, which bans open pit mining at protected forests.

The ministry of forestry and plantations has declared Gag Island as protected forests.

Junior Minister of Forestry Nur Mahmudi Ismail earlier said that the forestry law was only applicable to mining companies that receive contracts after the issuance of the law. Companies, which received contracts prior to the issuance of the law, may resume their activities.

Antam had been conducting mining activities on the island several years before the forestry law was issued.

The Gag Nickel project belongs to PT Gag Nikel, which is 75 percent owned by BHP and 25 percent by Antam.

In July this year, BHP reached an agreement with Falconbridge of Canada allowing the latter to inject US$75 million to finance the project's bankable feasibility study in exchange for BHP's 37.5 percent stake.

But, the deal was delayed over several issues, including the protected forest issue. (Alex)