Moratorium shutters mines in east Indonesia

(MENAFN- Asia Times) East Nusa Tenggara governor is first provincial leader to order a mining stoppage, notably in a region known for its picture-perfect tourist sites By John McBeth Jakarta, September 26, 2018 5:23 PM (UTC+8) <> <> <> <> <> <> <> An aerial view of Komodo National Park on eastern Indonesia's Padar Island. Photo: iStock/Getty Images

Newly installed East Nusa Tenggara (NTT) Governor Viktor Laiskodat has become the first provincial leader to order a moratorium on mining, on a chain of idyllic islands still largely unaffected by the uncontrolled artisanal mining that has ravaged other parts of Indonesia.

Acting days after his inauguration, the lawyer-turned-politician indicated he would review more than 300 mining licenses already issued across Flores, Sumba and West Timor, islands better known for their sandalwood and tourism than their minerals in the archipelagic nation's eastern reaches.

It is not clear what precipitated the move, but NTT civil society activists have long complained of damage to watersheds and agricultural land and say mining will only benefit a fraction of the province's 5.2 million inhabitants, of which 90% are Christian.

What has been characterized as a moratorium, however, appears to fall short of a permanent prohibition. 'We've been assured it is not the case of a total ban,' says one potential foreign investor. 'A review of licenses would be a totally responsible thing to do.'

National University of Singapore sociologist Maribeth Erba, who has studied the impact of mining and tourism in NTT, believes local NGOs have had the advantage of bad examples elsewhere to convince residents that extractive industries are not in their collective interest.

'I think also that being a province of small islands means mining activities are going to be felt as much more intrusive than in places like Sulawesi and Kalimantan,' she says, pointing to the prevailing argument among many residents that mining and tourism are incompatible.

Indonesia's Anti-Corruption Commission (KPK) has been behind a nationwide drive to reform the industry which has seen as many as a quarter of the country's 8,500 mining licenses revoked and another 2,500 declared 'not clean and clear' over the past four years.

Although it was no guarantee against corruption, the 2014 Local Government Amendment Law shifted the right of issuing mining licenses to provincial administrations after widespread complaints that scores of bupatis (district heads) were accepting kick-backs from miners to raise money for their election campaigns.

One of the companies affected by the NTT moratorium is Chinese-owned PT Grand Nusantara, which just last year was issued with an exploitation license, six years after being forced to abandon a 500,000-ounce gold deposit on Flores' Batu Gosok peninsula because of its close proximity to the Komodo National Park.

Adamant that tourism, not mining, was their preferred future, residents flocked to the polls in 2010 to vote out West Manggarei district head Fidelis Paranda and replace him with Catholic Church-backed Agustinus Dula, who followed through on his promise to rule out all mineral exploration.

When the 2014 local governance law shifted the responsibility for mining licenses back to the provincial capital, PT Grand Nusantara appears to have been given a reprieve, something Laiskodat may now be in the process of reviewing to determine if the project has passed an environmental impact test.

Also in the firing line is Australian-owned PT Gulf Mangan, whose plans to build Indonesia's first high-grade ferromanganese smelting hub near Kupang in West Timor are now presumably on hold until it is decided what to do with existing operations.

Only last July, in what the firm hailed as a sign of the 'tremendous support received from the local community,' acting Governor Robert Simbolon signed an agreement for the go-ahead of the US$17 million project, which will eventually employ eight furnaces, two of which only recently arrived from South Africa.

As the supply chain develops, PT Gulf Mangan eventually plans to ramp up production to 155,000 tons of alloy a year, using what is reputedly the world's highest-grade manganese from mines in West Timor and shipping directly to Australia's Perth and the Chinese ports of Tianjin, Jiangyin and Guangzhou.

The new facility joins nickel and bauxite smelter plants which have been built mostly by Chinese investors in Sulawesi and Kalimantan since the previous Susilo Bambang Yudhoyono government introduced an export ban on non-refined ore in 2014 in an effort to add value to Indonesia's natural resources.

Born in Kupang, Laiskodat, 53, served as a legislator for the Golkar Party between 2004 and 2009, before switching allegiance to the breakaway National Democrat Party (Nasdem) led by media magnate Surya Paloh, who has also dabbled in mining in his native Aceh province on Sumatra.

Earlier this year, he quit his parliamentary seat to run for governor, winning a four-way race with 36% of the vote. In contrast to predecessor Frans Lebu Raya, he pledged to take a tougher line with miners and focus on developing the province's livestock and agricultural potential.

Like Laiskodat, the senior partner in a Jakarta law firm, Flores-born deputy governor Josef Nae Soi, 66, is also an experienced lawyer and a two-term Golkar politician who has also served as a senior adviser to the minister for justice and human rights.

East Nusa Tenggara is best known for its manganese and gold deposits, but they are generally modest compared with what is found on the larger mineral-rich islands of Sumatra, Kalimantan and Sulawesi, and have mostly involved local entrepreneurs.

Protestors have already stymied gold mining in Central and East Sumba, where PT Fathi Resources, a subsidiary of Australian-owned Hillgrove Resources, has been exploring for the past decade. In one incident in 2011, three villagers were jailed for destroying the firm's equipment.

Local protests have also been effective on Flores' pristine island-district of Lembata, which has been quiet since Indonesian mining magnate Yusuf Marukh's death in 2011 apparently brought an end to plans for a large-scale copper and gold mine, built on what experts said were shaky geological findings.

Until then, local officials had supported the project, which would have meant the relocation of 60,000 local residents, or half of the population, to the main island of Flores, where Marukh promised to build apartments and schools for the displaced community.

One of the project's strongest critics has been Lembata-born former environment minister Sonny Keraf, who comes from Lamalera, one of the world's few surviving traditional whaling villages perched on the slopes of an active volcano on Lembata's south coast.

A native of Roti, an island off the southwest end of West Timor, the low-profile Marukh was a legend in Indonesian mining, acquiring a stake in more than 500 concessions across the country during the earlier days of Suharto's New Order regime when he sat on the parliamentary mining commission.

Among those concessions was East Kalimantan's Busang, made notorious by the 1997 Bre-X gold-salting scandal, and Batu Hijau, Indonesia's second biggest copper and gold mine on Sumbawa in neighboring West Nusa Tenggara, which Newmont Mining sold to Indonesian-owned Amman Minerals in mid-2016.

With powerful political backers, Indonesian mining companies are often allowed to ignore labor and environmental issues in more remote parts of the archipelago. But some of the worst damage has been done by uncontrolled armies of artisanal miners, whom local authorities seem powerless to stop.

None more so than on the former prison island of Buru, 700 kilometers northeast of Kupang, parts of which have been left a mercury-contaminated wasteland after being overrun by more than 100,000 illegal gold miners between 2011 and 2015.

Given the volcanic geology of many of NTT's islands, limited artisanal mining has largely been confined to West Timor's near-surface manganese deposits. But if there was ever a situation for the province to avoid in the future, Buru seems to encapsulate it all.

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