Govt to decide fate of 4 mining projects this month

Government will decide the fate of four mining projects located in Eastern part of Indonesia, which have been stalled due to problems with the ministry of forestry, a government official said Thursday.

R. Sukhyar, a senior official at the ministry of energy and mineral resources said the government had formed joint team led by the office of economic coordinating minister whose members including ministry of energy and mineral resources, ministry of forestry and ministry of environmental affairs. The team?s main task is to analyze the cost and benefit of each project and to decide whether or not to allow the projects to continue.

?The team agreed to put review of four mining projects as top priority and to decide which of the projects would be allowed to continue. We hope the decision could be made this month,? he said.

According to Sukhyar, the four projects are BHP Billiton?s Gag island nickel project in Irian Jaya, Strand Minerals? Weda Bay Nickel-Cobalt project in Halmahera, North Maluku, Newcrest?s Gosowong gold expansion project in Maluku and Rio Tinto-Newcrest?s gold project in Central Sulawesi.

The first three projects were stalled because their contract of works (CoWs) area is located in protected forest, where, according to Law no 41/99, open pit mining is banned.

Australia?s BHP Billiton, which owns 75 percent interest in Gag island nickel project was granted CoW 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 BHP, ministry of energy and mineral resources or Irian Jaya local governments.

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

Some of Strand Minerals? nickel-cobalt resources area in Weda Bay and Newcrest?s exploration extension area in Gosowong are located in protected forest areas.

Meanwhile, Newcrest had agreed to acquire Rio Tinto?s gold prospect in Central Sulawesi on a condition that the ministry of forestry allows the former to explore some 500 hectares of Poboya Forestry Park.

The four projects worth is estimated to reach US $ 2 billion.(alex/godang)