Govt won't extend exploration license of Ashton's Galuh Cempaka

The government will not renew the exploration license of diamond mining firm PT Galuh Cempaka a subsidiary of Australian miner Ashton Mining in South Kalimantan expiring at the end of this month, according to the head of the provincial office of the ministry of energy and mineral resources Tata Suhendis.

Tata made the statement during a working meeting with the provincial parliament commission D on mining, the local Banjarmasin Post daily said.

The statement was made following last week's accusation by the South Kalimantan administration that Galuh had illegally transferred its diamond output to Jakarta for sale. But Galuh had insisted that the transfer was legal because it was not for sale but only for acid testing and the diamond was kept in a secured place in Jakarta.

The paper said that the government would only issue a new exploitation license to Galuh. But prior to obtaining such license the company must first conduct environmental assessment study, and once it obtain the license the company must pay taxes to the local administration.

The paper also said that once Galuh sold the diamond output now kept in Jakarta, the company must also pay the necessary taxes to the South Kalimantan administration.

Galuh has so far obtained around 3,500 carat of diamond from the South Kalimantan mining operation.(*)