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Monday, 15 February 10
INDONESIA IN TALKS TO RESOLVE BANPU MINE CLOSURE


Indonesia is seeking to resolve a land permiting problem resulting in the closure of a coal mine in Kalimantan operated by a unit of Thailand's top coal miner Banpu PCL, a senior government official said on Monday.

Indonesian police temporarily closed the Jorong coal mine in Indonesia's portion of Borneo island last week over the permitting issue.

"We are holding talks at the coordinating economics' ministry on how to settle this issues," Bambang Setiawan, director general of coal, minerals and geothermal at the energy and mining ministry, told reporters.

The official said that the Jorong mine had already put in a request to Indonesia's forestry ministry to extend its permit, but one had not yet been issued.

"Because of a need to continue production, the producer went on operating without the extension permit," he added.

"We are holding talks at the coordinating economics' ministry on how to settle this issues" - Bambang Setiawan, director general of coal, minerals and geothermal

Banpu confirmed in a statement last Thursday that the mine had been shut but said it would only have a slight impact on production at its Indonesian unit Indo Tambangraya Mega Tbk

Indo Tambangraya has six coal concessions on Borneo island including Jorong in South Kalimantan.

Another official at the energy and mining ministry said problems like this over land permits could hit mining output by increasing uncertainty in the investment climate in Indonesia.

"Indonesia needs more coal to supply coal-fired power plants, especially in Java island, from this year," said the official, who declined to be identified by name.

"If there are many of this type of problem in the sector then it will cut coal production in future," added the official.

Coal output from Jorong mine accounted for around 1.97 million tonnes, or 8.6 percent of Banpu's 2010 production target of 23 million tonnes, the firm has said.

Banpu said it did not know when it would be able to resume operations.

Jorong mine produces sub-bituminous coal which is supplied to local power plants and overseas utilities.

According to estimates from Indo Tambangraya, Jorong mine produced 2.85 million tonnes in 2009, with 2.3 million tonnes targeted at the overseas market.

Indonesia Forestry Minister Zulkifli Hasan told Reuters on Jan 10 the ministry had revoked the land use permits for 23 mining and other firms operating in forested areas and may crack down further, indicating a tougher stance on environmental protection.

But the government of President Susilo Bambang Yudhoyono has also pledged to resolve bottle necks and other bureaucratic obstacles that frequently hamper investment projects and have discourage investment in the mining sector.
Source: Reuters



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