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New rule grants rainforest to mining firms in Indonesia for $80/acre

New rule grants rainforest to mining firms in Indonesia for $80/acre

New rule grants rainforest to mining firms in Indonesia for $80/acre
Rhett A. Butler,
March 10, 2008

A new Indonesian rule will grant concessions to mining companies operating in rainforests for as little as $200 per hectare ($80/acre) according to Mining Advocacy Network, a conservation group.

As reported by Reuters, the presidential decree issued on February 4 will allow mining firms to pay between 1.8 million and 2.4 million rupiah ($200-$265) per hectare for forest land used for housing, roads, mine sites and waste dumps. Previously, mining firms had to provide up to twice the area of the mining concession to compensate for the use of forest areas.

The Mining Advocacy Network has called for the decree to be revoked.

“Indonesia should be ashamed,” Reuters quoted the group’s Siti Maemunah as saying.

Indonesian environmental group Walhi is raising money to campaign against the rule and buy three square kilometers (1.9 sq mi) of forest in the proposed mining area.

Mining in the rainforest. Photo by R. Butler

Mining controversy

Reuters reports the decree applies to 13 mining firms that in 2004 were allowed to resume operations in protected forest reserves. That decree, issued by Indonesia’s fourth president, Megawati Sukarnoputri, overturned a 1999 law that banned open-pit mining in protected forest areas. Environmentalists say open-pit mining is one of the most destructive forms of mining and frequently cite pollution and deforestation from Freeport McMoRan Copper & Gold’s Grasberg mine in Indonesia’s Papua province as evidence of damages wrought by the industry.

The decree comes less than a year after BHP Billiton, the world’s largest mining company, announced it would develop seven “forest mines” in the so-called “Heart of Borneo”, an expanse of biodiverse rainforest on the tropical island that is home to orangutans and other endangered species. Last July The Sunday Times reported that the Australia-based mining firm has lobbied to have the protected status of some areas lifted so it can begin operations. The Sunday Times also reported that BHP Billiton met directly with president Megawati and “persuaded” her — by threatening to sue the fledgling democracy for $22 billion — to overrule Indonesia’s Parliament 1999 forest law. The company eventually secured 20,000 hectares of previously protected forests.

Reuters reports the new rule also applies to companies involved in oil and gas development, power transmission, hydro and geothermal power, and toll roads.

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