West Sumbawa set to open new gold mine

Panca Nugraha, The Jakarta Post, Mataram  | Sat, 01/03/2009 10:33 AM  

A domestic mining company plans to mine gold in Batu Hijau, West Sumbawa regency, West Nusa Tenggara, where U.S.-based copper and gold mining company PT Newmont Nusa Tenggara also operates. 

The West Sumbawa regency administration has issued a mining concession to PT Sumbawa Barat Sejahtera Bersama (SBSB), allowing it to operate in Brang Ene district. 

West Sumbawa Regent Zulkifli Muhadli told the media recently his office had initially issued SBSB with prospecting rights entitling it to carry out research and soil analysis at the designated site in Brang Ene. 

"We issued the prospecting license to SBSB after it agreed to conditions stipulated by the West Sumbawa administration, such as allotting a 15 percent stake and 2.5 percent of net profits to the regency administration," Zulkifli said. 

SBSB must also fill 75 percent of its workforce with local workers. 

According to Zulkifli, SBSB will process gold ore into ingots for export. Newmont ships gold ore in concentrate form overseas. 

"SBSB will invest up to US$500 million in equipment and it will send gold in ingot form overseas," he said. 

The exploration license entitles SBSB to a 23,000-hectare concession, mostly consisting of damaged forest. 

"Some of the area is forest but most is barren. The size of the exploration site would be scaled down to around 500 hectares once production begins," Zulkifli said. 

Earlier in December, West Nusa Tenggara Governor Zainul Majdi said as many as 48 mining licenses issued by a number of regency administrations in the province had never been used by companies to mine the respective prospects. 

He called on the regents that had issued the licenses to revoke them so that the idle sites could be mined by other companies. 

In response, regent Zulkifli said none of the disputed licenses had been issued by his administration. 

He said around 30 companies had applied for concessions to mine gold, copper or manganese over the past three years. 

"We have issued licenses for only three of them, and one of them is SBSB, which focuses on gold, and two others concentrating on manganese. We are careful when issuing permits because the natural resources are not renewable. We'd rather not issue permits for activities that do not benefit the people," Zulkifli said. 

He said the West Sumbawa regency administration had stipulated strict requirements for applicants of mining licenses.