Reuters reports possible two-year ban on Indonesian forest clearing permits

BHP Billiton (BHP-N) declined to comment on a Reuters news story in The Jakarta Globe that reported Indonesia has drafted rules for a two-year ban on permits for forest clearing to live up to international commitments to cut carbon emissions. (BHP is developing the Maruwai coal project in Kalimantan.)

The draft rules allegedly were drawn up “after signing a US$1 billion climate aid deal with Norway aimed at avoiding greenhouse gas emissions from deforestation,” Reuters reported on Aug. 4.

Bill Collier, vice president communications for Freeport McMoRan Copper & Gold (FCX-N), which operates the Grasberg copper mine in Papua, told The Northern Miner that the company’s mining operations in the country, “conducted in accordance with the company’s Contract of Work” with the Government of Indonesia, “will not be impacted by the moratorium,” while Newmont Mining‘s (NMC-T, NEM-N) head of corporate communications, Omar Jabara, said that at this point “it is unknown what impacts, if any, this proposal will have, assuming it is implemented in its current form, on Elang, since this particular exploration project is still in early stages. We are evaluating the proposal and will have a better understanding once it is finalized.” Elang is Newmont’s copper project on Sumbawa Island.

Quoting Priyo Pribadi Soemarno, executive director of the Indonesian Mining Association, Reuters wrote that the proposed moratorium “would make it harder to obtain forest land-use permits,” and noted that Indonesia’s president, Susilo Bambang Yudhoyono, “has vowed to cut greenhouse gas emissions by as much as 41% by 2020.”

“Most of Indonesia’s emissions are caused by clearing natural and peatland forests, so curbing deforestation is seen as a quick win,” Reuters reported, noting that the moratorium is expected to take effect in January.

Andreas Bokkenheuser, a mining and commodities analyst at UBS Equity Research in Singapore, told The Northern Miner that the key, as always, “is the enforcement of the law and not the law itself.”

He also noted that it will “take a while” before any moratorium on forest-clearing is implemented, “so it shouldn’t have a major impact this year.”