Govt allows resumption of suspended mining project due to forestry law

President Megawati Sukarnoputri signed a decree to allow BHP Billiton, Newcrest Mining Ltd. and other miners to continue 13 projects to explore for minerals, exempting them from a 1999 law that aimed to conserve protected forests, Bloomberg reported Thursday.

Megawati signed the decree on Thursday, said Lambock Nahattands, deputy head of the Cabinet secretariat. The new regulation will add a clause to the 1999 law allowing some companies that signed contracts with the government before 1999 to continue their exploration until the contracts expire.

``The priority is those projects that have started production,'' Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

Indonesia's Forestry Department banned mineral exploration in protected forests in 1999, halting about 150 projects to explore for minerals across the country. The energy and mineral resources ministry called for the ban to be lifted, prompting parliament to form a special team to review each project's environmental standards.

Megawati will issue a further decree identifying the projects that will be exempted from the law on forest conservation, said Forestry Minister Muhammad Prakosa.

Other than the 13 projects that are already in production, there are another nine ventures at the exploration stage that may be in protected forests and may be included in the list of exempted projects, Purnomo said.

The mining companies have been waiting for a new regulation for almost a year to allow them to mine in protected forests. The emergency decree signed by Megawati today will be handed to parliament so that it can be passed into law. Until parliament makes a decision, the decree will remain effective, Law Minister Yusril Ihza Mahendra said.

PT Gag Nikel, a joint venture between BHP Billiton and Indonesia's PT Aneka Tambang; PT Weda Bay; PT Nusa Halmahera and PT Citra Palu Mineral, are among the 22 companies whose operations are stalled by the forestry law.

PT Weda Bay is 90 percent owned by Canada's Weda Bay Minerals Inc. and the rest by state-owned Aneka Tambang.

Newcrest said last year that additional drilling at the Toguraci field would help it verify how much gold is in the deposit on Halmahera island.(*)