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Inco required to construct smelter

JAKARTA: Government still requires Inco to construct a nickel processing and purification factory (smelter) merely to continue the mining activity in Sulawesi although the company has committed to cooperate with the local government in managing the working

JAKARTA: Government still requires Inco to construct a nickel processing and purification factory (smelter) merely to continue the mining activity in Sulawesi although the company has committed to cooperate with the local government in managing the working contract areas.Indonesias Minister of Forestry, Zulkifli Hasan said that until now the local government of South Sulawesi has not yet given any recommendation regarding to permission to use the forest area in such location.As previously acknowledged, PT International Nickel Indonesia Tbk has secured the approval to extend its business permission until 2025.Inco is waiting for the recommendation from the local government. Otherwise, we will give it to them. One thing for sure, Inco must construct a smelter there, he affirmed this week.In 2010, the Ministry of Forestry issued second warning letter to Inco along with six of 13 units mining companies operated in preservation areas that had not secured the license to use such forest area.Nevertheless, the government of South Sulawesi refused to grant the recommendation for earning the license to utilize the 100,416.7 hectare area to Inco as it required the company to reduce the concession to 25,000 ha.Such rejection was addressed in the official letter of the Governor, Syahrul Yasin Limpo No. 522/2965/Disenergi on 14 May 2010 regarding to the recommendation to propose utilization license of the forest area belonging PT Inco in Luwu Timur municipal, South Sulawesi.On the other side, President Director of Inco, Tony Wenas said that the foreign investor has committed to cooperate with the government of Southeast Sulawesi to manage the 65,000 land being controlled through a working contract.The company opts to partner with other investor to establish a nickel industry in Southeast Sulawesi as it also rejects the claim to release the companys rights.Three optionsSuch decision regards to three options given by governor of Southeast Sulawesi, Nur Alam to Inco in order to determine its decision over its business continuance in the province at the very least on 31 January 2011.The other two options include first, Inco to hand over all of its mining business permission to the local government or continue its investment commitment yet, it must construct the smelter.We [Inco] have held a talk with Nur Alam as we agree the cooperation plan in managing the areas together. We have discussed this before 31 January 2011, he said.However, the technical matter over such cooperation will be further discussed with the local government of Southeast Sulawesi along with the partners companies. One thing for sure, there will be no the allocation of mining concession yet, along with other investors, we shall cooperate in the mining activity. We dont divide the areas, we agree to manage it together instead, said Tony.Based on the Letter of Agreement and Meeting Note between the government of Southeast Sulawesi and Inco in Jakarta on 31 Janaury 2011, it was stated that Inco is willing to provide working area in Southeast Sulawesi for then jointly managed by the new investors and local government.Incos will to partner with other investors was somehow triggered by the decision of the Southeast Sulawesis governor that have signed a memorandum of understanding with a Chinese company to manage nickel in the area.In the letter addressed to the governor of Southeast Sulawesi dated 24 January 2011, it was stated that besides such cooperation plan, Inco is also willing to participate in other cooperation. This notion is in line with the plan of the governor to make Southeast Sulawesi as the mining industrial area.Incos working contract areas include South Sulawesi (lake area), Central Sulawesi ( Bahudopi, Lingke, Bulubalang, Kolonodale) and Southeast Sulawesi (latao, Suasua, Paopao, Pomalaam, Torobulu, Malapulu, Matarape, Lasolo). The total wide of the area is 218,528.99 hectare. Of such area, Inco has only tapped 6,000 hectare. (T02/wiw)

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