Govt to reduce maximum size of mining areas

The government would reduce the maximum size of mineral and coal mining concessions that a contractor can control from 100,000 hectares at present to 15,000 hectares, Koran Tempo reported on Thursday.

The new policy is stipulated in the Oil and Mineral Resources Bill, which is being deliberated at the House of Representatives.

Director of Mineral and Coal Mining Development at the Ministry of Energy and Mineral Resources MS Marpaung said in Jakarta on Wednesday that the new rule would only be applied to new contracts signed after the bill is passed into law as the government will continue to respect the existing contracts of work.

Under the bill, the maximum size of exploration is set at 15,000 ha, while the exploitation area is set at 5,000 ha at maximum.

Under the existing regulation, foreign investors may apply a maximum of 100,000 ha for coal concession, a maximum of 62,500 ha for a contract of work (CoW) mineral mining. Meanwhile, local companies applying for Mining Contract (KP) can get an exploration area of 10,000 ha at maximum. (*)