Potential lawsuits by 22 mining companies, including Freeport-McMoRan Copper & Gold and Inco, against the Indonesian government could reach a staggering US$31.5 billion, according to a government spokesman.
The companies argue that forestry legislation ratified in 1999, which prohibits open-pit mining, violates contracts that were in place before the law came into effect.
The law, designed to protect rapidly depleting tropical forests from illegal logging, has forced some firms to suspend projects. For instance, Nusa Halmahera Minerals, most of which is owned by Australian-based Newcrest, recently suspended gold mining in the North Moluccas islands because the forestry law does not allow the area to be mined. Also, Indonesian nickel and gold producer PT Aneka Tambang has postponed development of nickel resources on Gag Island, part of Papua province.
Other operations affected by the law include those owned by PT Inco, in South Sulawesi province, and Freeport-McMoRan, in Papua.
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