PTBA appeals against revocation of its mining permit in South Sumatra

The revocation of the coal mining permit of PT Bukit Asam (PT BA) by the South Sumatra government will affect the investment climate in the province, which has become one of the country's main investment destinations, Kompas reported on Wednesday.

PT BA's lawyer Todung Mulya Lubis said in Palembang on Tuesday that the revocation of PTBA's coal mining permit indicated the inconsistency in the government's mining policy.

"The legal uncertainty will certainly affect the flows of investment to the province," he said. Todung was in Palembang to formally register the company's appeal against the local state administration court's decision to revoke PTBA's coal concession rights in the province's Lahat regency.

The local state administration turned down PTBA's attempts in August to annul the local government's decision to revoke its coal concession rights in Lahat regency.

PT BA received a permit from the central government to open coal mine covering an area of about 24,751 hectares in Lahat regency in early 1990s. The company received the permit later in 2003 from South Sumatra governor to begin production activities in the mining site. However, in 2004, the South Sumatra government revoked the permit. The Lahat regency also issued a decision to support the revocation of the coal mining company's permit.

According to Todung, the revocation was against the central government's regulation No. 75/2003 on the issuance of mining permits in the country. The governor of South Sumatra and the regent of Lahat had misinterpreted the autonomy law and their mistake had caused a loss to PT BA, which has spent at least 206 billion to finance its exploration activities in the mining area. (*)