Draught, haze, money crisis have mixed impact on mining
Draught, haze, money crisis have mixed impact on mining
JAKARTA (JP): Director General of General Mining Adjat
Sudradjat said the drought, the haze and the rupiah's
depreciation against the U.S. dollar had a mixed impact on the
mining sector.
Adjat said Thursday that the depreciation of the rupiah
against the dollar was expected to raise mining revenue, but the
haze had disrupted some mining activities of companies located in
West Indonesia.
He added that the drought had troubled coal mining companies
which relied on water for power generation or transportation, but
coal output was expected to rise because the drought made coal
mining easier.
"Rain naturally makes coal mining difficult while the drought
makes it easier," explained Adjat.
Adjat said the current depreciation of the rupiah would profit
mine operators because they exported most of their product in
dollars while paying for operational costs in rupiah.
He said the haze, resulting from brush and forest fires in
Sumatra and Kalimantan, had disrupted activities of some
companies like gold mining company PT Kelian Equatorial Mining in
East Kalimantan.
Kelian's president John Pegler told Reuters that the company
was experiencing serious logistic problems moving supplies from
the provincial capital of Samarinda, 440 kilometers up the
Mahakam river and to the Kelian strip mine, due to the haze and
drought.
The fires have not only caused haze problems in those areas
but also other provinces in Western Indonesia and neighboring
Singapore and Malaysia.
Pegler said operations had been stopped several times due to
brush fires, which, combined with dust, cut visibility down to
hazardous levels for transportation.
The month-long drought caused by the El Nio weather
phenomenon had also decreased Mahakam's water level, hampering
river transportation, he said.
Due to the fall in the water level, barges carrying two
million liters of fuel had been replaced by vessels carrying
100,000 liters, which was only enough for a half-day operation,
Pegler said.
Pegler expected a drop of 10 percent to 15 percent from the
company's 1997 production target of 14.5 tons of gold.
Kelian is 90 percent owned by Australia's Rio Tinto and 10
percent by Indonesian firm PT Harita Jayaraya.
Adjat said the drought had also affected nickel mining company
PT International Nickel Indonesia (Inco) in South Sulawesi. The
company's Soroako hydropower plant did not have enough water to
generate a sufficient amount of electricity for operations.
An Inco official expected the company would fail to meet its
1997 production target of 92 million pounds of matte.
Inco is 59 percent owned by Canada's Inco Ltd.
Adjat said that state-owned mining company PT Antam's nickel
mine in Southeast Sulawesi was not affected by the drought
because it used a fuel-powered plant for electricity, said Adjat.
(jsk)