Tue, 29 Apr 2008
Indonesia plans to limit the area that metal and coal mining firms can explore in the mineral-rich country in a bid to prevent domination by a few companies, a legislator said on Monday (14/4/08), Reuters reported.

A draft bill is expected to be passed by August, said Airlangga Hartarto, chairman of a parliamentary commission in charge of energy and mining issues, said. He added there are currently no such limits.

Indonesia plans to limit exploration and exploitation areas for metal mining to 100,000 hectares and 25,000 hectares per firm respectively, he said.

It also plans to limit exploration and exploitation areas for coal mining to 50,000 hectares and 15,000 hectares per firm respectively, he added.

"This is aimed at preventing mining firms from controlling large areas," Hartarto told reporters. He, however, added that the limits will not affect existing contracts.

Despite a global price boom for most commodities that has prompted a fresh flurry of investment and mega-mergers, uncertainty over the new mining law has hampered the development of the country's rich coal, copper, gold, tin and nickel deposits, a key driver of economic growth.

Indonesia expects to produce 205 million tons of coal in 2008, with domestic demand seen at 52 million tons and the remainder to be exported, according to energy ministry data.

The government said late last year that it expects investment in geothermal and mining products to reach $1.55 billion in 2008, compared to $1.35 billion in 2007.



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