Fri, 12 Feb 2010

Indonesian police have temporarily shut down the Jorong coal mine in South Kalimantan, which is owned by PT Indo Tambangraya Megah, the country’s fourth-biggest coal miner, since late last week because it does not have a valid permit.

Bambang Setiawan, director general of coal, minerals and geothermal energy at the Energy Ministry, said ITM’s land-use permit expired at the end of last month and the company had not managed to process the extension yet.

“The permit remains under review at the Forestry Ministry,” said Bambang Gatot Ariyono, director of coal and mineral production at the Energy Ministry.

“The mine will temporary be closed until the permit is issued,” Bambang added.

Darori, the director general for forestry protection at the Forestry Ministry, confirmed that ITM’s permit was under review.

“It’s what we call bureaucracy,” Darori said.

“There are stages to get the permits and our human resources are limited while we need to coordinate with other ministries and conduct field inspections. So it takes some time before we can issue the permit,” Darori added.

ITM, which is owned by Thailand-based Banpu Public Co., said in a statement that the temporary cessation of operations at Jorong will slightly hurt its coal production this year as the mine accounts for 8.6 percent of its projected annual output of 23 million tons.

“The stoppage was [caused] mainly by the overlapping of related regulations from different ministries,” said ITM.

The company operates six coal concessions in Kalimantan, including in Jorong.

“The company, however, does hope that this issue will be settled soon.”

Pri Agung Rakhmanto, an energy analyst at the Reforminer Institute, said the government needed to get a better grip on the issue of mining permits.

“The central government and local governments don’t have good coordination on the regulations,” he said.

According to the Energy Ministry, Indonesia, Asia’s largest coal exporter, produced 254 million tons of coal in 2009, a 5.8 percent increase from 2008 and well ahead of the government’s target of 230 million tons.

About 78 percent of the output was exported to buyers in Japan, China, India, Australia and Africa, while the rest was sold domestically.