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View all search resultsMining permit revocations signal 'creeping nationalization', critics warn
The abrupt revocation of mining permits and the planned transfer of assets to state firms have drawn sharp criticism from experts, who warn the moves signal nationalization, undermine legal certainty and threaten to erode Indonesia’s appeal to foreign capital.
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A worker walks across an operational area at the Martabe gold mine located in the Batang Toru district of South Tapanuli, North Sumatra. The mine is operated by PT Agincourt Resources, a unit of Indonesian conglomerate PT Astra International. (JP/Ruth Dea Juwita)
T
he abrupt revocation of mining permits and the planned transfer of assets to state-owned enterprises (SOEs) have drawn sharp criticism from analysts, who warn such moves undermine legal certainty and threaten to erode Indonesia’s appeal for foreign capital.
Carried out without prior consultation with stakeholders, including the Energy and Mineral Resources Ministry, the policy created significant instability for the mining sector and sent a harmful signal to the global market, said Rizal Kasli, chairman of the Indonesian Mining Experts Association (Perhapi).
"It is regrettable that this has happened. It could undermine investor confidence," Rizal told The Jakarta Post on Tuesday.
"The implication is that, even an investment officially signed off by the government, could be suddenly revoked."
Moreover, the revocation process remained unclear, with the affected companies having yet to receive official notification letters, he added.
The government’s Forest Area Regulation Task Force previously announced that it had revoked PT Agincourt Resources’ Martabe gold mining permit, following allegations that its operations contributed to flash floods around the Batang Toru River last year.
Agincourt Resources is a subsidiary of publicly listed PT United Tractors.
