Govt to fix mining permit system

The Energy and Mining Resources Ministry said that the government would adopt a model similar to that used in the oil and gas industries in awarding mining permits to prevent future overlapping claims and curb excessive issuance of new permits.

Thamrin Sihite, Director General for coal and mineral resources at the ministry as quoted by The Jakarta Globe said that under the new rules, a potential miner must place a bid to compete with other companies in a process monitored by the central government, which then passes on the winning bid to a local government.

Under the present structure, a company can apply for a mining business permit, known as an IUP, for a specific parcel of land with a local government as long as it adheres to that government?s terms and condition.

?We will define a number of mining areas, which will then be offered to interested bidders,? Thamrin said on Monday.

Thamrin said the number of IUPs issued has been uncontrollable since the regional autonomy law was passed in 2001, allowing local governments to issue mining permits.

?Before regional autonomy, we only issued up to 500 mining business permits, but since then the number has reached 10,000,? he added.

Thamrin said that the development had led to the emergence of overlapping claims on mining areas.

?In one particular case, we found that a local government issued a permit for an area bigger than its own size,? he said.

More than half of all mining business permits, totaling 10,566, have yet to receive approval from the government, Thamrin said.

He said that overlapping ownership claims could be reduced by defining a certain area for mining activities, which in turn would reduce the potential for land conflicts.(*)