Mining investors want Forestry Law be amended
Friday, July 6 2001 - 02:56 AM WIB
Speaking at the Regents Meet Investors forum hosted by Petromindo.com at Grand Melia Jakarta Hotel on Thursday (July 5), IMA chairman Beni H. Wahyu said that parts of the forestry law that needed revision were those that prevent open pit mining operation in preserved forests.
Worse still, under the new forestry law, the government often declared arbitrarily certain areas as preserved forests, all of sudden putting certain mining concession inside the newly-declared preserved forests.
Beni said that in reality 90 percent of mining concessions were now located inside preserved forests, while open pit mining technology was the most common mining technique employed by Indonesian mining firms to exploit minerals in their concession.
He contended that it was mining companies, and not the forestry ministry or the office of the state minister of environment, that knew what technology to be employed at certain mining areas.
Whether to employ open or closed mining operation, it would be much influenced by the level of mineral reserves contained in the mining concessions. And therefore, it would not be fair to force mining companies to use closed pit mining technology in preserved forests as many times it would not be feasible to pursue.
"This law surely kills mining business," Beni said. "With this regulation, no investors will come here."
He noted that there had been practically no new investment in the mining sector since 1998. This is especially caused by the passage of the forestry law, inconsistent tax regulations and also the remaining unstable political and security situation.
He warned that if the government did not take actions in improving legal certainty in the country, no new mining investors would invest in Indonesia as a number of neighboring countries offer attractive packages of incentives to mining investors. (*)