Govt finally bringing illegal mining to a halt: Executives

JAKARTA (JP): Illegal mining which proliferated during the economic crisis and the period of legal limbo following the fall of Soeharto are declining thanks to the government's actions, mining executives said.

"We've seen illegal mining activities drop over the past six months," the commissioner of major coal mining company PT Adaro Indonesia, Soetaryo Sigit, said.

Adaro, a joint venture of Australia's New Hope Corporation Ltd., Mission Energy of the United States and local firm Swabara Group, in South Kalimantan was one of the worst hit by the illegal mining.

Aside from Kalimantan, illegal mining was rampant in Sumatra, Java and Sulawesi.

South Kalimantan's Banjarmasin Post reported illegal miners in the coal-rich province extracted between five million to six million tons of coal worth Rp 990 billion (US$133 million) over the past two years.

Due to small production costs, they reportedly could sell the product 25 percent cheaper than mining contract holders.

However, Soetaryo said the illegal miners faced serious problems after the provincial administration banned coal producers from using public roads to transport the product.

"Illegal miners are practically disabled by this ruling, because they heavily depend on public roads for coal distribution," Soetaryo said.

The local paper said since the provincial administration enforced the ruling on Jan. 1, more than 400,000 tons of coal worth Rp 40 billion could not be transported to ports for export.

The provincial administration issued the ruling following complaints from the public, who accused the coal trucks of dominating public roads, threatening other motorists and causing severe air pollution.

Under the contract of works, mining companies are required to build their own roads to transport their coal, which most illegal mining companies could not afford.

According to Soetaryo, illegal coal mining in South Kalimantan began with the arrival of foreign investors.

The coming of the foreign investors made the locals realize the economic value of their coal, he said.

"Encouraged by the absence of firm measures against illegal gold miners in the past, they engaged in illegal coal mining as well," he said.

He said illegal mining soared after the crisis hit the country in the middle of 1997, forcing many jobless people in the province to seek alternative employment in the mining sector.

The availability of cheap heavy equipment further boosted the their activities, he added.

He also noted the government's cancellation of its project of opening one million hectares of rice fields in neighboring Central Kalimantan, as part of its effort to cope with the crisis.

The cancellation of the project left many pieces of heavy equipment available for cheap hire.

Affordable heavy equipment also came from outside Kalimantan, as the crisis forced the construction industry to suspend most of its projects in Java, Bali and Sulawesi, he said.

However, he added it was capital owners from outside the province who mostly took advantage of the situation because most local people could not afford the equipment.

He said it was the reason the illegal mining activities did not gain support from locals, who found the activities only benefited outsiders instead of the local community.

According to a study by Banjarbaru National Technology Development Academy in South Kalimantan, illegal coal miners were often involved in land disputes with locals.

The illegal miners paid only small fees to the local people for using their land to transport their coal and offered them poor job opportunities as truck drivers, security guards and cooks.

But since the illegal miners ignore environmental protection program, the locals were left to bear the environmental damage caused by their operations, the study said.

Publicly listed state mining company Aneka Tambang also noted a decline in illegal mining in its contract area in Pongkor, West Java.

"The year 1998 was the worst, when we had some 6,000 illegal miners. But the number has decreased by around 30 percent," company president Dedi Aditya Sumanegara said.

He said improving economic conditions encouraged illegal miners to seek other employment.

Dedi recalled that in 1998 the company operated at a production capacity of only 40 percent due to the overwhelming presence of illegal miners.

Traditional miners from nearby Bogor and Lebak have descended on Pongkor and mined for gold without Antam's permission for many years. Many have died in accidents at the site.

The illegal miners ran amok in 1998, attacking Antam's camp and attempting to burn it down.

Antam was able to raise its production capacity to 70 percent last year and is now expecting to operate at full capacity, he said.

"We hope to raise our gold output to 3.6 metric tons from 3 tons last year."

He said he placed much hope on a government steering committee, comprised of representatives of various parties, assigned to formulate a comprehensive solution to the illegal mining problem.

"But law enforcement is important because it's impossible for illegal miners to operate without backing from governmental officials," Dedi said.

The newly appointed director general of general mining, Surna Tjahyadjayadiningrat, confirmed the likely involvement of government officials in illegal mining.

"We must be brave enough to wipe out the backers, whether they are in the bureaucracy, the military or the police force."

He said the government would not be able to effectively crack down on illegal miners if the backers were left untouched. (bkm)