S. Sulawesi rejects Inco?s request to get leasehold recommendation
Tuesday, June 8 2010 - 02:32 AM WIB
Inco needs the leasehold right to develop 100,417 hectares (ha) -forestry area of its concession in East Luwu regency, Bisnis Indonesia reported Tuesday..
The local government instead asked the company to return a large part of its mining area on the grounds that it lacked serious commitment to developing the mining area. In a letter signed by South Sulawesi Governor Syahrul Yasin Limpo, the local government asked the company to reduce the size of its mining area to only 25,000 ha.
Inco has a mining concession of 218,528.99 ha, including 118,387.45 ha located in South Sulawesi. The existing mining area is about 3 percent of the 6.6 million ha awarded to the company under a contract of works (CoW) issued in 1969.
The CoW expires in 2025. Under the new Mineral and Coal Law No.4, 2009, concession holders are requested to submit a proposal for the development of the area until the end of the contract. A concession holder is also requested to obtain a leasehold right from the forestry ministry if they want to develop forestry areas within their concessions. In order to be able to get leeasehold rights, concession holders need to get a recommendation letter from the local government.
The local government said that Inco lacked serious commitment in developing its concession area given the fact that during its presence for the last 40 years, Inco was only able to develop 5,000 ha of the concession area awarded to the company. With only 15 years left on its conract, it is unlikely that the company will be able to develop the entire concession. (*)