Sand quarrying activities in Riau come to a standstill

Adianto P. Simamora, The Jakarta Post, Jakarta

Sand quarrying activities in Riau have come to a standstill for months as miners cannot afford the new tax and royalties imposed by the government.

"The miners have suspended operations since the government raised the base export price," Safri Burhanuddin, director of research for maritime territory and nonliving resources at the Ministry of Marine Affairs and Fisheries told The Jakarta Post.

Last October, the government raised the base price for sand exports to US$3 from $1.5 per cubic meter.

Based on the new export base price, Safri said, sand exporters had to pay the government some 80 U.S. cents per cubic meter in export tax and 60 cents in royalty. They also have to set aside about 1.5 cents for community development programs.

He said such an increase had forced exporters to renegotiate their contracts with buyers from Singapore.

"We have heard that buyers have refused to pay the new price that's why the quarrying activities have stopped in Riau," he said.

The Association of Riau's Sand Exporting Companies (Hipepari) confirmed that all sand quarrying companies had suspended activities for two months.

But association chairman H. Ficky, said the suspension was caused by a licensing procedure set by the government, which he said was complicated.

"Although businessmen have received mining contracts from the local government, they still need to seek another 14 licenses from the central government," Ficky said as quoted by Antara.

He said that such a tight policy had made it difficult for local businessmen to start up a business.

Sand from Riau has been exported to Singapore for many years to support the island's coastal reclamation project.

The export of sand to Singapore however, has sparked protests from many parties, including legislators, who say that it only causes losses to the local and central government.

Uncontrolled sand mining in the coastal areas of Riau has caused severe environmental damage, leading to the disappearance of a number small islets in the province.

Aside from quarrying activities by licensed operators, a large of amount of sand from Riau has been reportedly illegally quarried and smuggled to Singapore, which is thus far the sole buyer of Indonesian sand.

To help protect the marine environment, the central government has taken over the supervision of sand quarrying in the province from the regional government.

President Megawati Soekarnoputri has established a special team to control sand exports and illegal quarrying in Riau waters. The team, which is led by Minister of Maritime Affairs and Fisheries Rokhmin Dahuri, consists of several ministers and top military officials.

Rokhmin earlier said some 300 million cubic meters of sand were being smuggled out of the country every year.

Rokhmin issued a decree on a zoning mechanism to help reduce the number of areas where sand can be mined.

Under the zoning mechanism, some 50 percent of existing sand mining areas will be off-limits to mining operations.

The Ministry of Trade and Industry is in charge of the supervision and issuance of licenses for sand mining and its export.