BRMS may halt zinc exploration activities

IDX listed PT Bumi Resources Minerals (BRMS) said that it might halt zinc exploration activities in North Sumatra as it is unlikely to be able to comply with the government?s regulation that would ban export of raw materials by 2014, The Jakarta Post reported on Friday.

It said that the regulation prohibiting the exportation of unprocessed metals starting from 2014 would come into effect at the same time as BRMS expects its subsidiary PT Dairi Prima Mineral to start production at its lead and zinc mining concession area in North Sumatra.

?We are studying the regulation, including the requirement to build a smelter. However, in estimating our production, it appears that would be uneconomical to build a smelter," BRMS head of investor relations Herwin Hidayat said.

Herwin said that BRMS was open to the possibility of cooperating with foreign investors to build a smelter.

Dairi Prima, which is 80 percent owned by BRMS and 20 percent by state-owned miner PT Aneka Tambang, recently secured a forest-use permit for mining, and exploiting at its zinc and lead concession. The permit is valid for eight years and can be extended.

According to Herwin, the company was expected to have an annual production capacity of 1 million tons of lead and zinc ore by 2014. BRMS has set aside US$200 million to develop Dairi Prima, particularly to build infrastructure and other supporting facilities in the mining area.

Indonesia Mining Association (IMA) Executive Director Syahrir Abubakar said that all stakeholderss could find solutions and alternatives for mining companies that may not be ready to establish smelters by 2014.

?We need to consider how to provide the electricity and infrastructure, as well as map our ore reserves for the smelters,? Syahrir said.(*)