January 26, 2012 / 1:30 PM / 8 years ago

Indonesia to revoke mining permit after protests

* Sumbawa island operations hit by local protests

* Company Sumber Mineral Nusantara planned gold mining

* In joint venture with Arc Exploration

* Minister says permit revocation will take time

JAKARTA, Jan 26 (Reuters) - The Indonesian government said on Thursday it will revoke the exploration permit of mining company Sumber Mineral Nusantara whose operation on Sumbawa island has been hit by violent protests by residents in which two people have died.

Thousands of people rioted and burned a government office on Sumbawa on Thursday to demonstrate their rejection of the company’s gold exploration plan, which they say will damage their land and livelihoods, according to police and local media.

The protests are the latest example of scattered demonstrations by some citizens in Southeast Asia’s top economy against foreign-owned companies they fear will exploit the country’s natural resources at their expense.

Residents including villagers and students in the town of Bima on Sumbawa have for nearly a year demanded that Bima’s regent revoke the permit for a joint venture between PT Sumber Mineral Nusantara and Australian-listed Arc Exploration Limited .

Bima is approximately 1331 km (827 miles) east of Jakarta.

Footage from the Metro TV station showed thousands of people massing outside the office of the regent and setting fire to it. Clouds of smoke rose into the air as the police fired warning shots.

“The preliminary information from Bima is that people were acting anarchist by burning the regent’s office ... We don’t know if there are any casualties,” said national police spokesman Boy Rafli Amar. Another spokesman said police had made no arrests and the situation remained unstable.

Energy Minister Jero Wacik said the exploration permit would be revoked but the process would take some time.

Two people were killed and eight wounded in clashes with police on Dec 24 as protesters occupied Sape port.

The Arc Exploration Ltd announced on Jan. 3 that its exploration license has been temporarily suspended for one year since Dec. 23. (Reporting by Olivia Rondonuwu, Reza Thaher and Heru Asprihanto; Editing by Matthew Bigg)

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