Indonesia revokes gold mine, plantation permits after floods

Indonesia will revoke permits held by 28 resource companies, including one of the country’s largest gold miners, after authorities linked their alleged forest misuse to floods that killed more than a thousand people in Sumatra in December.

The permits span a wide range of land uses — like logging, pulpwood plantations, mining and hydropower — and cover more than a million hectares, according to a government presentation on Tuesday. The companies were found to have violated laws governing activities in forest areas, State Secretary Minister Prasetyo Hadi told reporters.

The revocations affect several well-known companies in the region, including PT Agincourt Resources, which owns the major Martabe Gold Mine and is part of the Astra International conglomerate. Pulp producer PT Toba Pulp Lestari, founded by billionaire Sukanto Tanoto, will also have its permits rescinded.

The move mirrors a broader crackdown by President Prabowo Subianto against alleged malfeasance in the natural resources sector, which is largely owned by the nation’s elite businessmen. The government has already seized parts of lucrative nickel and coal mines, as well as more than 4 millions hectares of palm oil plantations which have been consolidated under state control.

Shares of PT Astra International, which owns Agincourt through listed subsidiary PT United Tractors, fell as much as 13% on Wednesday. Trading in Toba Pulp Lestari shares has been suspended since Dec. 17 after the government halted the company’s operations pending an audit into its potential role in the floods.

Toba Pulp Lestari said on Wednesday it was awaiting official clarification in the form of a written decision from the government, and that it continues to carry out essential operational activities, asset maintenance, and forest area security.

Agincourt did not immediately reply to a request for comment.

Around 900,000 hectares of the seized land will be designated for restoration to conservation forest, including nearly 82,000 hectares within Tesso Nilo National Park in Riau province, Hadi said. The Environment Ministry recently said it was suing six companies for more than $280 million for allegedly causing massive environmental damage in North Sumatra province.

Environmental group WALHI North Sumatra said the revocations must be followed by a halt to new permits in the same areas, warning against granting licenses to the affected companies or others with similar operations. The group also urged authorities to impose strict sanctions, saying renewed licensing would only perpetuate environmental damage.

(By Eko Listiyorini and Chandra Asmara)