China-backed power plant, Astra gold mine lose permits in Indonesian environmental crackdown

About this update from Pt Astra International Tbk

A China-backed hydropower plant and a gold mining unit run by conglomerate Astra International were among the 28 firms that had their permits revoked by the Indonesian government following accusations of environmental breaches that worsened last year's floods. The cyclone-induced floods and landslides on the island of Sumatra in late November killed 1,200 people, destroyed homes and displaced over a million residents. Environmental experts said the devastation was worsened by rampant deforestation to make way for mines and plantations. President Prabowo Subianto on Tuesday revoked the permits of 28 firms involved in forestry, oil palm and cocoa as well as power generation and mining. They included PT North Sumatra Hydro Energy (NSHE), PT Agincourt Resources and PT Toba Pulp Lestari IDX:INRU.HYDRO PLANT ACCUSED OF ECOLOGICAL DAMAGENSHE, responsible for the Batangtoru hydropower plant, is controlled by China's SDIC Power Holdings Co. Ltd, according to Indonesia's state utility firm. The project, currently under construction by PowerChina, has long been on the radar of environmental activists, with many calling for it to be stopped because of the ecological destruction it has wrought on the biodiverse island. Prior to the floods, the power project, which will have a total installed capacity of 510 megawatts, was expected to be fully operational by the end of this year.SDIC Power did not immediately respond to a Reuters' email seeking comment. NSHE said it is formulating answers to Reuters' queries. PowerChina could not immediately be reached for comment. On Monday, Huang He, China's consulate general in North Sumatra, told local media that the construction of the Batangtoru plant was compliant with Indonesian laws, adding that he hoped the company's activities could be resumed.FIRMS SEEKING CLARITY Pulp maker Toba Pulp on Wednesday said it was seeking clarification from the government while it assesses the potential impact on its business."This government statement has the potential to impact timber harvesting, the primary raw material for the company's production," it said in an exchange filing.Astra International's Agincourt, which operates the Martabe gold and silver mine, declined to comment on the revocation as it has not received any official notice from the government, adding it will respect the government's decision while maintaining the company's le...

View stock analysis, news, and events for Pt Astra International Tbk