Papua urges stay in Gag nickel mines

Papua urges stay in Gag nickel mines

Irian Jaya or Papua has urged Australia's BHP Billiton to stay
in a nickel mine project on the province's Gag Island and asked
the government to allow the project, provincial governor Jacob
Soloussa said on Thursday.

Soloussa also said he asked Indonesian President Megawati
Soekarnoputri to give special treatment to the province by
allowing it to export logs.

Falconbridge Ltd said last month it had pulled out of the Gag
Island nickel project and would allow a joint venture agreement
with BHP Billiton Plc/Ltd to lapse.

BHP Billiton said last month in Melbourne it was reviewing its
options for Gag Island. With an estimated 240 million tons of
nickel, it had been viewed by the market as one of the company's
longer-term sources of growth.

Canadian nickel giant Falconbridge and BHP signed a joint
venture in June 2000 to consider developing Gag Island, but moves
by Indonesia to protect forests and ban open-pit mining in those
areas led to a suspension of the project.

"We need the Gag island nickel project to be established,
because that will give benefits and contributions to the
province," Soloussa told reporters after meeting Megawati.

"We want the government to allow the project and to issue the
license as soon as possible," he said.

"There are misunderstandings about the forestry mapping about
Gag island. There is no (protected) forest there," he added.

"There will be a government team to check the situation."

An official at the mines and energy ministry said separately
that the government was working on issuing regulations that could
ease mining restrictions.

Soloussa also said: "We asked the President for special
treatment to allow the province to export log timber despite
forestry ministry rules banning log exports."

The ban had hurt Papua's revenue, he said, adding the
provincial government was monitoring activity closely to protect
the environment.

Indonesia Forestry Minister Muhammad Prokosa issued a ban on
log exports effective in October last year to protect diminishing
tropical forests. -- Reuters