Local govt threatens to close four coal firms due to reclamation fund

The Lahat government in South Sumatra province has threatened to close down the operation of four coal mining companies for their refusal to provide reclamation and post-mining guarantee funds.

Head of the regional mining office Kosasih said last week that the local government had issued mining permits to eight companies to develop coal mines in the regency.

?They are all still in exploration stages,? he said. However, he said, four of the companies had not paid reclamation and post-mining guarantee funds yet.

He said the local government had given the four companies until the end of 2010 to pay the required funds. ?But they are still unable to heed the instruction,? Kosasih, adding that the local government would freeze their permits if they failed to provide the reclamation and post-mining guarantee funds by the end of January.

The four coal mining firms are identified by their initials as PT BT, PT BGG, PT BP and PTPN. Other four coal mining firms which have paid the funds are PT SMS, PT DRP, PT ABS and PT ATP.

According to the existing mining law, mining companies are obliged to provide reclamation and post-mining guarantee funds. The placement of funds into a bank account does not however nullify their obligation to carry out reclamation and post-mining programs. If they fail to carry out the reclamation and post-mining programs in line with "criteria of success", the minister or governor or regent/mayor have rights to appoint a third party to carry out some or all the reclamation and post-mining programs using the guarantee funds. (*)