Nickel miner PT Vale Indonesia says it will return up to 13,000 hectares of idle concessions in Morowali, Central Sulawesi, if the administration finds investors to jointly develop the areas.
The president director of PT Vale Indonesia, Nico Kanter, said that Vale, formerly known as Inco Indonesia, would release the untapped concessions, as repeatedly requested by the local administration.
Nico said that he had asked the local administration in return to revoke duplicate permits given to other operators in its concessions.
“At present, as many as 41 IUPs [mining permits] have been issued for 36,000 hectares of mining concessions owned by Vale,” Nico said during a meeting between lawmakers on House of Representatives Commission VII overseeing mining, Morowali district officials and Central Sulawesi provincial official on Thursday.
Nico said that the local administration needed to issue tough measures to revoke the duplicate permits issued to the miners, who he claimed have seriously damaged the environment.
In response, Morowali regency secretary Syahril Ishak said that the local administration had issued dozens of IUPs to other mining companies after Vale Indonesia abandoned it concessions, reasoning that other companies could develop the concessions and provide additional income for the central government, the local administration and local residents.
Syahril also said that Vale had not honored its Corporate Social Responsibility (CSR) commitments. “It didn’t open a nickel processing factory, a harbor, an airport or a road to connect Central and South Sulawesi as it promised.”
The local administration’s decision to issue duplicate IUPs to the 43 companies in PT Vale Indonesia’s concession has been criticized by the Central Sulawesi chapter of the Mining Advocacy Network (Jatam) .
The director of Jatam Central Sulawesi, Andika, said that he suspected that there had been improper discussions between Morowali regency officials and the mining companies given IUPs.
During the meeting, Nico also complained about uncertainty surrounding renegotiation of a work contract with the government and the issuance of forest-use permits (IPPKH) from the Forestry Ministry.
In the firm’s middle-term investment plan for 2013 to 2017, Vale Indonesia said it would spend up to US$2 billion in new investment to expand a nickel refinery plant in Sorowako and a nickel purification factory in Bahodopi, and to build an 80-kilometer road connecting Bahodopi and Sorowako.
However, the company has not followed through on the plan due to the uncertainties.
Commission VII chairman Sutan Bhatoegana said that both Vale Indonesia, the central government and the local administration needed to find a win-win solution to their problems.
Vale Indonesia started its nickel mining and processing business in Sulawesi as PT Inco in 1996 under a work contract with the central government. The contract was modified and extended until Dec. 28, 2025.
The company previously had 218,528 hectares of mining concessions, comprising 118,387 hectares in Sorowako, South Sulawesi; 63,506 hectares in Pomalaa, Southeast Sulawesi; and 36,635 hectares in Bahodopi and Kolonodale, Central Sulawesi.
The government took back about 28,000 hectares of concessions given to Vale in 2010, leaving the firm with 190,000 hectares. (koi)