December 30, 2010 / 11:25 AM / in 9 years

Indonesia to soon issue new underground mining rules

JAKARTA, Dec 30 (Reuters) - Indonesia will soon issue regulations to allow underground mining in protected forests, the government said on Thursday, a move likely to attract more investment but alarm green groups.

Indonesia has some of the world’s largest reserves of minerals and is keen to increase revenue from the mining sector, which hosts international firms such as Newmont Mining Corp. (NEM.N) and Rio Tinto (RIO.AX).

The country also boasts some of the world’s largest and most pristine rainforests, but conflicting mining and forestry regulations have resulted in confusion over which areas may be exploited.

President Susilo Bambang Yudhoyono is expected to sign the new regulation “within weeks”, said forestry minister Zulkifli Hasan, and it is likely to kickstart projects that have stalled because of tight forestry policy.

“I have signed the draft, so now we are waiting for the final stage, which is the president’s signature,” Hasan said.

The regulation will clarify a law issued in 1999 that prohibited open-pit mining in protected forests but did not specify whether underground mining was allowed.

Currently 13 mining companies are allowed to carry out open-pit mining in protected forest areas because their projects were in advanced stages before the practise was prohibited.

Hadi Daryanto, the secretary general of the forestry ministry, did not give details of which companies would start underground mining, but said several could start exploring for coal, nickel and gold next year.

Indonesia has reserves of 546.8 million tonnes of nickel, 112 million tonnes of bauxite and 42.85 million tonnes of copper (measured in copper metal), data from the mining and energy ministry showed.

Mineable reserves of tin stand at 338,911 tonnes, measured in terms of refined tin, while gold reserves were 4,341 tonnes measured in terms of gold ingot, it said. (Reporting by Olivia Rondonuwu; Writing by Fitri Wulandari; Editing by David Fox)

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