BHP Billiton, Antam may be allowed to develop Gag island nickel project soon

Government is expected to soon issue a ruling that allow Anglo-Australian resources company BHP Billiton and State miner PT Aneka Tambang Tbk to continue to develop their huge nickel resources in Gag island in the easternmost province of Papua, according to a senior government official.

?President Megawati Sukarnoputri together with minister of energy and mineral resources, minister of forestry, coordinating minister of economic affair, minister of environmental affairs and minister of Eastern Indonesia development acceleration will meet tomorrow to decide whether or not to allow mining activity in Gag island,? director general of geology and mineral resources Wimpy S. Tjetjep told reporters on Tuesday.

BHP Billiton and Aneka Tambang through subsidiary PT Gag Nikel was granted Contract of Work in 1998, which gave the company the right to explore for nickel in Gag Island in Sorong regency, Irian Jaya. At that time the status of Gag Island was limited production forest.

However, in September 1999 the government enacted Law no. 41 which banned open pit mining on protected forest and one month later, ministry of forestry changed the island?s status to protected forest without consulting PT Gag Nikel, ministry of energy and mineral resources or Irian Jaya local governments.

Since then, PT Gag Nikel had tried to lobby the government to change the island?s protected forest status into another form of land status that permits open mining.

An industry source told Petromindo.Com a team consisted of high-ranking officials from the above ministries excluding ministry of environmental affairs was assigned by coordinating minister of economic affairs to evaluate the case had submitted its report which recommended ministry of forestry to alter the status of Gag island to limited production forest which could accommodate mining activities.

?So, there is a good chance tomorrow?s meeting will recommend Gag island for mining, provided that the activity is carried out under strict good mining practices? said the source.

Gag island has a nickel resource of 216 million ton and estimated investment needed to develop the project is US$ 1.2 billion. (godang)