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View all search resultsCrackdown on mining permits faces legal scrutiny
A potential lawsuit over halted mining operations could expose the state to fiscal risks reaching tens of trillions of rupiah, extending far beyond legal fees to include lost revenue and compensation claims.
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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. (JP/Ruth Dea Juwita)
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potential lawsuit over halted mining operations could expose the state to fiscal risks amounting to tens of trillions of rupiah, extending far beyond legal fees to include lost revenue and compensation claims.
Josua Pardede, chief economist at Permata Bank, stated that the costs from such disputes stem primarily from legal fees and, more significantly, the financial impact of the settlement or ruling.
The latter includes possible obligations to reinstate permits or pay compensation for halted operations.
"The decisive component is the outcome: compensation, lost revenue. The bill's size is based on the project's cash flow and economic value, not merely courtroom costs," Josua told The Jakarta Post on Tuesday.
The Martabe gold mine, operated by PT Agincourt Resources, recorded approximately US$558 million in sales and a net profit of $158 million in 2024. Its contributions to government revenue, including royalties, taxes and fees, totaled $113 million.
Agincourt Resources is a subsidiary of publicly listed PT United Tractors, which itself is a subsidiary of diversified conglomerate PT Astra International.
"At this scale, the state's fiscal risk includes not just legal costs, but also potential lost revenue from operational disruption and compensation claims," Josua said.
