T

he government'€™s one-stop business licensing office has proven unable to speed up the issuance of necessary permits for copper mining company PT Vale Indonesia, which was planning to expand its plant in Sorowako, South Sulawesi.

The publicly listed company was forced to undergo a lengthy procedure at various ministries, as the one-stop licensing office under the Investment Coordinating Board (BKPM) could not issue the required permits.

'€œ[The issuance of] the permits remains a major challenge because the BKPM is not the only office [to issue the permits]. There are several issues involving ministries that deal with technical matters,'€ Vale Indonesia president director Nico Kanter said.

Nico said the company was applying for permits for the utilization of land inside forest areas and awaiting approval for environmental studies for the expansion of its plant.

In August this year, the Energy and Mineral Resources Ministry handed over business permit processing for the mineral and coal sector to the BKPM'€™s one-stop office.

The one-stop service is part of President Joko '€œJokowi'€ Widodo'€™s administration'€™s move to streamline bureaucracy processes, which have hindered investment in Southeast Asia'€™s biggest economy.

Responding to Vale'€™s concerns, the Energy and Mineral Resources Ministry'€™s director for minerals, Mohammad Hidayat, admitted that the mineral and coal office needed to work harder to assist companies facing similar problems.

'€œWe will continue trying to be more active and engaged in finding solutions to the problems because mining firms are our partners,'€ he said.

Vale Indonesia, shares in which are traded on the Indonesia Stock Exchange (IDX) under code INCO, is looking to boost the capacity of its plant in Sorowako to 90,000 metric tons per year.

'€œWe are now making major improvements for Sorowako'€™s first-phase expansion, which is expected to cost US$450 million. We now also have to look at current nickel prices,'€ Nico said.

The company has lowered its multiyear capital expenditure for this year by 6.5 percent to $110.8 million, according to finance director Febriany Eddy, though she declined to reveal the amount of capital expenditure for next year.

The company is planning multiyear investment worth $4 billion, which will be spent gradually on the Sorowako project and another nickel smelter development in Pomalaa in Southeast Sulawesi.

Vale holds a contract of work covering a total of 118,435 hectares of land in Sorowako-Towuti in South Sulawesi, Bahodopi in Central Sulawesi and Pomalaa-Suasua in Southeast Sulawesi.

Data from the company show that the mining areas have 108 million metric tons in proven reserves and 17.4 million metric tons in probable reserves.

For its greenfield project in Pomalaa, the company cooperates with Sumitomo Metal Mining Co. Ltd. The project remains at the feasibility study stage.

Vale would, Febriany said, maintain its output projection next year at around 80,000 metric tons, similar to the level hoped to be achieved this year.

'€œWe have several scenarios that we are still studying. The price outlook is very uncertain, so we'€™re making sure our spending won'€™t be greater than our income. However, the range of production is unlikely to differ from 2015,'€ she said.

The company reported 58,875 metric tons of nickel in matte production during the first nine months of the year, increasing slightly by around 1 percent compared with 58,141 metric tons in the same period last year.