Indonesian authorities have seized hundreds of acres from mining companies including PT Weda Bay Nickel and PT Tonia Mitra Sejahtera due to missing forestry permits, part of a crackdown on illegal resource exploitation.
This move, which has impacted nickel prices, highlights the government's efforts to regulate mining activities. The taskforce identified more than 4.2 million hectares (ha) operated by 51 companies as lacking appropriate forestry approvals, reported Reuters.
Indonesia is the largest producer of nickel products in the world. Following the crackdown by the country’s taskforce on the alleged illegal exploitation of natural resources, the benchmark three-month nickel price on the London Metal Exchange rose by 1.32% to $15,350 per tonne as of 8.01am GMT.
A 148ha area at PT Weda Bay Nickel's concession was seized for lacking a necessary forestry licence, according to Mining Ministry official Rilke Jeffri Huwae.
"They have the mining permit, but they don't have the borrow-to-use permit for the forest," Rilke stated.
Weda Bay Nickel is controlled by Tsingshan Holding Group, Eramet and Aneka Tambang.
PT Weda Bay Nickel is seeking clarification from the taskforce, according to a company source. Weda Bay Nickel spans 45,000ha on the island of Halmahera in Indonesia.
Eramet Indonesia said it is committed to complying with regulations, stating: "We respect the decisions of the Indonesian authorities and fully support PT WBN in working closely with the authorities to ensure all activities undertaken meet the required legal and regulatory standards."
The seized land, a rock quarry for construction material, does not cover the mining extraction site, Eramet noted, adding it does not expect significant operational impact. The government has closed off the area, according to Eramet.
Norway's sovereign wealth fund has excluded Eramet from its portfolio, citing risks of human rights violations and environmental damage at the nickel mine in Indonesia. The fund had a 0.44% stake in Eramet, valued at approximately $6.8m (Nkr66.98m), as of 30 June. The council cited Eramet's involvement in the PT Weda Bay Nickel joint venture, reported the Jakarta Post.
The council expressed concerns about deforestation, loss of habitats for endangered species and threats to indigenous people. Eramet stated it "deeply regretted" the fund’s decision, emphasising its commitment to responsible mining and environmental stewardship.
Additionally, the Indonesian taskforce seized a 173ha area managed by PT Tonia Mitra Sejahtera in south-east Sulawesi, according to Febrie Adriansyah, a senior prosecutor at attorney general's office. Tonia's mining permit spans almost 5,900ha.
