Govt urges House to accept mining proposal
Govt urges House to accept mining proposal
Fitri Wulandari, The Jakarta Post, Jakarta
The government called on the House of Representatives to
immediately allow 13 mining companies to resume activities in
protected forests because investment in the mining sector is
running thin.
Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti said the existing investment plans in the mining sector
were projected to last until 2007.
"After 2007, there will be no new (investment) activities.
Please allow these 13 companies to go in," Dorodjatun said in a
media briefing after opening a conference of Indonesian geology
experts on Tuesday.
The 13 mining companies are among 22 companies who have
appealed for the resumption of their operations in protected
forests after the implementation of forestry law No. 41/1999,
which bans open-pit mining activities in protected forests.
These companies received contracts years before the law was
enacted and their working areas were not classified as protected
forests at the time. But their appeal was rejected by the House
last month.
A government document shows that the 13 mining firms could
contribute around US$379.81 million worth of tax and non-tax
revenue each year. These mines would absorb 47,269 local workers,
with eight of the 13 companies employing a workforce 90 percent
comprised of local workers. Their total investment in the country
up to 2002 had reached $7.6 billion.
The forestry law, however, is lauded by environmental
activists. They say mining activities are responsible for damage
to Indonesia's forest resources.
While acknowledging concerns over environmental degradation,
Dorodjatun said mining areas would only take up 2 percent of
total protected forest areas, which currently stand at 11.4
million hectares.
Dorodjatun said new mining activities should start within 10
to 20 years to take advantage of the rising price of mining
commodities spurred by high demand from China's rapid
manufacturing industry.
"If we start new mining investment after 20 years, it will be
too late because by then China may be slowing down and has less
demand," he claimed.
The mining sector has been in the doldrums for years due to
uncertainty in government mining policy, high taxes, lack of
security guarantees, corruption and inconsistencies related to
regional autonomy. These have discouraged existing mining
companies and potential investors.
The country is slipping off the stage of the world's mining
industry in terms of attractiveness for investment. The
Indonesian Mining Association (IMA) said Indonesia was ranked 27
out of 35 countries surveyed between 2001 to 2002.