A call for a mining moratorium in Indonesia is good news says Gulf Manganese
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An Indonesian province has called for a halt to exploration as it tries to rein in illegal miners.
The call for a ban came from the new governor of Indonesia’s East Nusa Tenggara province (see map below), explorer Gulf Manganese (ASX:GMC) told investors.
“Following inauguration as the new governor of the Province of East Nusa Tenggara yesterday, Bapak Viktor Bungtilu Laiskodat made a statement in an interview that he was calling a moratorium on all mining activities in the province while he and a special team examine whether these mining activities have met rules and regulations,” Gulf told investors.
Perth-based Gulf is closing on first production of manganese in the region and is building a smelting hub in the province near the Timorese town of Kupang.
But Gulf says the government review is a good thing.
“Gulf welcomes this review since it will reduce illegal mining and promote environmentally sustainable activities, which will bring benefits to the community and security for the supply of ore to the company,” Gulf said.
East Nusa Tenggara is the southernmost province of Indonesia. It is located in the eastern part of the Lesser Sunda Islands and includes West Timor.
Gulf is well over halfway through the construction of Indonesia’s first ferro-manganese smelter, which it expects to begin commissioning before the end of this year.
About 90 per cent of manganese goes into steel-making and Gulf will be producing ferro-manganese – a ferro-alloy with a high content of manganese used to deoxidize steel.
Gulf has inked 19 agreements with local miners to take their ore off them and is also in the process of picking up a couple of its own mines to supply the smelter.
But the crack down on illegal miners is not expected to have an impact on Gulf’s operations, managing director Hamish Bohannan told Stockhead.
“Historically there has been a lot of illegal mining, not only in NTT but also in Indonesia,” he said.
“We’ve already committed that we will only buy from what’s called ‘clean and clear’, which are people that have got licences and have all their paperwork in order. So it shouldn’t be an issue at all.”
Deliveries of the ore are expected to start this month.
Gulf says it will update shareholders if the review impacts any of its activities.
Mr Bohannan says Gulf will begin talks with the new governor shortly.