Indonesia says mining will continue in protected forests

The Indonesian government will allow 13 mining companies to continue operations despite violations of the country’s forestry law.

The move provides a boost to the mining industry after a controversial forestry law banned open-pit mining in forested areas, thereby forcing some companies to suspend projects even though the law was rarely enforced.

Critics of the forestry law have said mining firms, mostly foreign, may have grounds for legal action against the government worth US$31.5 billion for violation of contracts following ratification of the law.

Among those affected by the forestry law are International Nickel Indonesia, controlled by Inco, in South Sulawesi province, and Freeport-McMoRan Copper & Gold, which operates the Grasberg mine in Papua province.

The new decree allows mining contracts approved by the government before the forestry law was ratified in 1999 to remain in effect even if they conflict with forestry rules.

Nusa Halmahera Minerals, most of which is owned by Australia’s Newcrest Mining, recently suspended gold mining activities in the North Moluccas because the forestry law forbids that area to be mined.

As many as 22 mining companies are said to be in violation of the forestry law.

The law’s defenders say Indonesia is rapidly losing tropical forests as a result of illegal logging and mining. They argue that legislation is needed to protect the forests.