Indonesian Lawmakers Urged to Reconsider Inco's Mining Rights

Indonesian Lawmakers Urged to Reconsider Inco's Mining Rights

Asia Pulse

June 30, 2003

Kendari, SE Sulawesi: Southeast Sulawesi Governor Ali Mazi has urged the House of Representatives to reconsider the issuance of nickel mining rights to PT Inco over 65,000 hectares of land in the Indonesian province. "Inco has been given the right of control over the nickel mining area in Southeast Sulawesi since the early 1970s, but has failed to start the mining activities. This is obviously quite a loss (of potential revenues) to the province," Mazi told journalists here on Friday.

The governor said Inco has been paying an annual land rent of US$1 per hectare, making a total of US$65,000 an insignificant amount in comparison to potential earnings from the exploitation of the mining area. He said the provincial administration and legislative assembly have repeatedly urged the Canadian mining company to start exploiting its mining concession in Southeast Sulawesi, but have as many times been ignored. "As such, the Southeast Sulawesi provincial administration expects the House and the central government to endorse that the working contract with Inco for the nickel mining be reconsidered," he said.

Mazi suggested that the mining rights should either be handed over to a third party or be implemented in a joint venture with another company. He cited PT Antam, Indonesia's state allied mining company which also holds a nickel concession in Southeast Sulawesi and has exploited it since the 1970s, as one of the most prospective joint venture partners.

Meanwhile, provincial legislator, LM Barium, reported from Jakarta that he had met Inco's management to convey the demand for the reconsideration of the working contract, but had received no response. According to him, it would be better to hand over Inco's mining rights to Antam, which will soon build another smelting plant while the nickel deposit in its 7,000-hectare concession in Kolaka district is nearly exhausted.