By Desy Nurhayati and Alfian, The Jakarta Post, Kendari
Publicly listed PT Inco, a local unit of Canada-based mining giant Vale Inco is likely to have a hard time ahead as South East Sulawesi governor Nur Alam has threatened to annul the company's operating license, following a series of alleged violations.
Nur Alam said recently the company's 64,000-hectare mining activity in the province would be halted, as the company should have completed the construction of a nickel smelter before the 2005 deadline, as stated in the contract.
He also accused Inco of selling nickel ore direct to consumers, although it is supposed to be processed to create jobs and facilitate tax revenues for local government.
"I can say that the 64,000 hectares of land the company has occupied since the 1970s is not productive. That is why we are planning to give the concession to other parties which can significantly improve the livelihoods of local people."
"Inco, in comparison, has only occupied 4,000 hectares for its project in Soroako (South Sulawesi) during the last 39 years. So why should they exploit such a large area here which is basically idle," said Nur Alam.
Officials from the local administration has been intensively lobbying the Energy and Mineral Resources Ministry to revoke the Inco's working contract for the concession which is valid for another 20 years.
Currently, according to Nur Alam, Inco only mines some 4,000 hectares of the concession, while nickel from the area is mostly sold to the state-owned company PT Aneka Tambang (Antam) for further processing in other provinces.
Inco director of corporate external relations Sri Kuncoro said the company was always trying to comply with working contracts and existing government regulations.
He said whenever there was any problem, the company was always ready to join discussions with related stakeholders and to seek further advice from the authorities.
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