From: Reuters
Published March 14, 2008 04:28 AM

Indonesia may allow more mining in forest areas

JAKARTA (Reuters) - Indonesia may relax rules to allow more mining companies to operate in forest areas, a government official said, in a move that will alarm green groups worried about rapid deforestation.

Dozens of mining companies could benefit from a decision to allow firms that previously held exploration permits in forest areas to develop mines, Simon Sembiring, director general of mineral resources at the energy and mines ministry, told Reuters.

The plan would still require a presidential decree and individual firms would also need to be reviewed on a case-by-case basis, he said late on Thursday.

Indonesia's conflicting mining and forestry regulations have resulted in considerable confusion over which areas are protected and which may be opened for exploitation.

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The government issued a decree in February, which allows mining firms, including open-pit miners, to pay between 1.8 million rupiah and 2.4 million rupiah ($195-$260) per hectare for forest land used for housing, roads, mine sites and waste dumps.

The decree applies to 13 mining firms that four years ago were allowed to resume mining operations including exploration, development and production in forest areas after proving that their projects were economically viable and had mining reserves.

The 13 firms include Freeport McMoRan Copper & Gold, which operates the massive Grasberg mine in Indonesia's remote Papua province that has been a frequent source of controversy over its environmental impact.

But Sembiring said that other mining companies, which had mining permits before a forestry law was issued in 1999, could also be eligible for similar permits.

Indonesia's forestry law prohibited open-pit mining in protected forest areas. But in 2004, President Megawati Sukarnoputri issued a decree allowing 13 companies to resume mining activities in these areas.

"Many mining companies got permits to mine in the areas a long time ago before the forestry law was issued, so why should they be stopped?" said M. S. Marpaung, director of coal and minerals at the energy and mining ministry.

The government decree allowing mining firms to pay what is regarded as a pittance by some environmentalists to exploit protected forest areas has sparked anger among green groups.

Indonesia had the fastest pace of deforestation in the world between 2000-2005, according to Greenpeace, with an area of forest equivalent to 300 soccer pitches destroyed every hour.

Last week, Siti Maemunah, an official at the Mining Advocacy Network, a conservation group, said the government should be ashamed of approving the decree and called for it to be revoked.

(Reporting by Mita Valina Liem, Writing by Fitri Wulandari, editing by Ed Davies and Sanjeev Miglani)

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