Indonesia mulling a revised mining permit system

JAKARTA (Scrap Monster) : The Indonesian Energy and Mineral Resources Ministry plans a thorough revision in its mining permit system.

The Ministry proposes to local administrations from issuing excess and overlapping mining permits by expanding the central government’s authority to grant concessions. The revised plan called for permits only to be issued through a tender process.  The announcements were made by the Director General for Minerals and Coal, Thamrin Sihite.

There have been numerous allegations that local administration authorities have mismanaged the existing policy which has lead to over-exploitation of natural resources. According to statistics, more than 10,500 mining permits were granted in the past ten years, out of which almost half of them are found legally challenging. A recent survey conducted by the Frasers Institute lists Indonesia among the world’s worst ten mining destinations.

The Ministry proposes to develop a map categorizing the nation’s mining areas into mining business zones (WUPs), mining areas specified for local communities (WPRs) and the state reserve zones. After completing the map with assistance from local administrations, the government can seek its endorsement from the House of Representatives. The WUPs could then be offered to companies through a transparent bidding process. The Government plans to implement the system next year.

Indonesia, the world’s largest exporter of thermal coal for power plants, nickel ore and tin, has  rich untapped mineral resources.