More than half of existing mining licenses were issued not in accordance with standard procedures required by law, with the result that many mining concessions overlap one another, a senior mining official says.
Energy and Mineral Resources mineral and coal director general Thamrin Sihite said at a press conference in Jakarta on Friday that of the 8,475 mining licenses registered at the ministry as of May 21, 4,504 were problematic.
“There are many cases in which more than one permit has been issued for the same mining area, most often in mining sites located on the border of two regencies or provinces. In some cases, new region heads issued new permits for areas whose permits were issued by the previous head,” he said.
The problems of overlapping permits emerged after the passing of the 2009 mineral mining and coal law which grants local administrations the authority to issue mining permits. Prior to the implementation of the law, only the central government could issue mining permits.
Thamrin said that many local administrations were not ready to carry out the new system. Many of them did not report the permits they had issued to the central government, he said.
“We estimate that the real number of mining permits in Indonesia could be between 10,000 and 20,000,” he said.
The ministry summoned all governors, regents and mayors from all provinces and regencies nationwide in early May to report the number of mining permits they had issued, and submit relevant documentation to determine whether the permits were lawful.
“We are still open to local administrations that haven’t reported the number of permits they have issued. The deadline is June 6. After that date, we’ll enter all of the data into our database and publish it on our website,” Thamrin reported.
He said a thorough database would help the government strengthen supervision of mining operations across the country, and improve production monitoring and smuggling prevention.
However, he said he did not yet know what kind of sanctions the ministry would hand down to local administrations that did not produce the required data before the deadline.
“We’re still discussing punishments with the Home Ministry,” Thamrin said.
During the press conference, Thamrin said many mining permit holders had not fulfilled their non-tax revenue obligations to the central government.
He said some had paid the money to the regional governments, when they should all pay directly to the central government.
Coordinating minister for the Economy Hatta Rajasa said the government would temporarily halt the issuance of new mining permits to settle growing conflicts between mining companies over overlapping mining concessions in the country.
Such conflicts have discouraged foreign investors from expanding their mining operations into Indonesia.
The Indonesian Mining Association (IMA) said earlier that the country needed at least $1 billion per year for exploration to maintain the current level of mineral and coal production. Currently, the country spends only $10 million searching for mineral reserves.