Indonesia weighs mining in protected forests

Indonesia weighs mining in protected forests

Reuters - January 29, 2003

Jakarta - Indonesia is considering issuing a decree to allow mining firms to operate in areas protected by the country's forestry law, Mines and Energy Minister Purnomo Yusgiantoro said yesterday.

Purnomo said the 1999 law, which bans open pit mining in areas covered under the regulation, had hampered investment.

"We are still carefully evaluating this to make sure this is the right step. We need investment in the mining sector," Purnomo told reporters without elaborating.

Another ministry official said the decree could override the forestry law.

Mining analysts have said the forestry law was so broad that should it be enforced fully it could apply to virtually all mining operations in Indonesia, a country rich in minerals. While the forestry statute has generally not been enforced, industry sources say concern about it has caused several prospective foreign mining companies to withdraw from Indonesia or hold back their development plans.

Indonesia has said there are at least 50 firms with current mining contracts that would require parliamentary action to allow them to continue operating legally. The firms are made up of foreign and local companies.