Geological Agency Work to Support Exploration for New Prospects. Vol 138
Introduction;
Issuance of new prospects for coal and metal minerals has effectively stopped since the introduction of the 2009 Mining Law. Much of the Ministry of Energy and Mineral Resources (ESDM) work has been directed at improving the management of exploration and mining concessions, resolving the tenement overlap problem, weeding out non-performing parties, installing new operating procedures, and centralizing authority over the mining industry. Reform of the mining sector is ongoing with further implementing regulations being developed.
During the recent MGEI Annual CEO’s forum (May 2022), Moehamad Awaludin, Koordinator Bidang Mineral – Penyelidik Bumi Ahli Madya PSDMBP, provided some insights into the Geological Agencies activities. This article provides some outline of the Geological Agency activity related to the mineral and coal sectors. The ESDM & Geological Agency web sites provides access to many ESDM and Geological Agency reports.
Directorate General of Minerals & Coal
Objectives of the Directorate General of Mineral and Coal [ESDM] includes 1) provide guidelines for the development of mineral and coal sector laws and regulations, 2) improve the sectors human resources and promote economic development, 3) compliance with global standards, monitor resource inventory, and 4) cooperate with other ministries, agencies, business sector etc. This policy has been determined after consultation with stakeholders, professionals, academics, associations, and various government parties. Further input from all related parties is invited via email: preparation.program.minerba@esdm.go.id (Sep 2021).
Within the ESDM lies the Geological Agency [Badan Geologi] that conducts and overseas research, investigation, and services in the fields of geological resources, volcanology and geological disaster mitigation, groundwater, and environmental geology, geological surveys, as set out in the Strategic Energy and Mineral Resources Strategic Plans. The Geological Agency also supports many of the other ESDM ministry programs. The Geological Agency submits reports to the Minister and have close coordination with the Directorate General of Minerals & Coal, including recommendations for new coal & metal mining prospects.
The Geological Agency.
The Geological Agency is guided by some planning documents, including the Strategic Plan of the Ministry of Energy and Mineral Resources (Renstra KESDM) 2020-2024 and the Strategic Plan (Renstra) of the Geological Agency 2020-2024. This includes the Ministries vision of “Being the Main Driver of National Development Through Optimal Energy and Mineral Resources Management for the Realization of Independence and Energy Security for the People’s Welfare that is Just and Equitable”. Other drivers for the Geological Agency are the support for national development in the energy and mineral resources sector and other sectors for Sustainable Development Goals. This comprises eight (8) fields of: agro-geology, climate change, energy, engineering geology, geo-hazards, geo-heritage and geo-tourism hydrogeology and contaminant geology, and minerals. and rock materials. The Geological Agency plays an essential role in providing upstream data related to disclosure of resources and reserves, preparing recommendations for working areas and areas for mining business permits, resource exploration, geothermal, oil and gas, minerals and coal, coal methane gas and geological disaster mitigation services, groundwater management, and environmental geology recommendations for spatial planning.
The Geological Agency consists of: a. Secretariat of the Geological Agency; b. Centre for Mineral, Coal and Geothermal Resources; c. Centre for Volcanology and Geological Hazard Mitigation; d. Centre for Groundwater and Environmental Geology; and e. Geological Survey Centre. The Geological agencies 2021 budget ceiling was Rp. 623.806.349.000, being about US$ 60 million.
Geo-Information.
According to the Geological Agencies 2021 annual report; Geo-information includes data and information management, including collection, processing, compilation, presentation, packaging, storage, retrieval, and dissemination, as well as updating of data and information. Its products include data and information in the form of maps, atlases, digital books, and information systems. Problems related to geo-information include: data and information and their management systems are still scattered or not yet integrated; data and information on geological substance are not yet available in detail; and dissemination of geological information and its use is also still lacking.
Recommendation of Mineral & Coal Working Areas
Under the present regulation 96/2021, the Governor is to recommend areas for mineral and coal development, after considering available geological data, local spatial planning, local forestry classification, and local district boundaries. These recommendations are then reviewed by the Geological Agency to include the amount and quality of geological data, the presence of inferred resources, Clear & Clean from overlapping or other infringements, forestry boundaries. The Geological Agency then conducts limited site confirmation, that may include upgrading the data (including drilling) to affirm resources.
According to the Geological Agencies 2021 annual report, recommendations are forwarded to the Directorate General of Mineral and Coal as consideration in determining the mineral WIUP. In accordance with the Regulation of the Minister of Energy and Mineral Resources Number 12 of 2011 concerning Procedures for Determining WUP and Information Systems for Mineral and Coal Mining Areas, the data sources for the preparation of metal mineral WIUPs are based on, among others: 1) results of mining investigation and research activities in the context of determining WP; 2) exploration in WP; 3). the data from expired / returned by the IUP, KK & WIUP holders. The 2021 target of identifying only 10 small blocks was achieved for 4 gold, 5 nickel, 1 tin blocks. Parameters analysed for coal WIUP and CBM candidates include coal carrier formation, coal potential data (outcrops or drilling results), coal resources and reserves data, as well as other data that may be accessible (eg old investigation data). Land use information is also considered in this evaluation process. The output achieved its 2021 target of recommendations for 10 (ten) medium to small WIUP coal and 1 (one) WK CBM.
Apparently, many governors seek to have new exploration areas issued in their areas. They see the mining industry as a key driver of employment and growth in this post Covid 19 recovery period, and express urgency to take advantage of the present spike in commodity prices.
There would seem to be some consideration for the Minister to issue some twenty (20) coal and twenty (20) metallic mineral tenements before the new implementing regulations are issued. These projects would be issued with significant input from the Governor’s, whereas the proposed new implementing regulation may reduce the Governor’s role, and further emphasize the centralization process to identify and issue new exploration projects.
Evaluation of Resources & Reserves.
The Geological Agencies determination of resources typically requires evaluating geological data. Unfortunately, many (about 40%) IUP’s have not submitted data, and some data is difficult to verify. Site visits and further exploration is required by the Geological Agency to justify recommendations for issuance as new exploration area. A limiting factor is that the Geological Agencies Key Performance Indicators are linked to the budget item that only justifies a work program for 10 coal and 10 metallic mineral prospects per year. Comments by the Geological Agency at the recent CEO public meeting indicated some 96 recommended prospects of new areas have been passed up to the directorate general to date.
The Geological Agencies 2021 annual report outlines the activity of updating the balance of resources and reserves was undertaken for 1) metal mineral resources, 2) non-metallic mineral resources, 3) coal resources, 4) coal methane gas resources and 5) geothermal resources. This evaluation included input from the Centre for Mineral, Coal and Geothermal Resources, provincial government agencies, state-owned enterprises and private mining companies.
The updating included 16 metal mineral commodities that included tin (cassiterite), platinum, gold, silver, copper, nickel, cobalt, bauxite, iron, manganese, mercury, antimony, chromite, molybdenum, vanadium, monazite & xenotime. Updating of Coal, Peat and Coal Methane Data and Resource Balance recorded data on coal resources of 110,069.91 million tons with total reserves of 36,278.85 million tons. Of the total 1,567 points that have been successfully inputted as balance data, 151 points have been verified by the Geological Agency PSDMBP, 65 points have been verified by the CP of the PKP2B Company, 49 points have been verified by the CP of the PMA IUP Company and 598 points have been verified by the CP of the PMDN IUP Company. Coal quality based on calorific value class in Presidential Decree No. 13 of 2000 was renewed by PP No. 45 of 2003. Meanwhile, deep seated coal resources in 2021 are 488.94 million tons. Updating for non-metal mineral commodities, included andesite, basalt, ornamental stone, limestone, feldspar, phosphate, granite, kaolin, clay, marble, quartz sand, sea sand, sand, tras, and zeolite. Data on these commodities can be found at; https://geologi.esdm.go.id/assets/media/content/content-laporan-kinerja-badan-geologi-tahun-2021.pdf
Avenue for acquisition of new exploration prospect.
The present regulations allow for two options for parties to take up new project areas.
1) Areas recommended by the Geological Agency are approved by the Minister to be submitted to the auction process. Such areas are to have at least some data and good prospectivity, and or Indicated Resources, plus verified regarding land use and IUP clean and clear. Therein such areas are offered / revealed (including identifying areas and commodity) to the public with 60 days prior notice to the auction. The Geological Agency is also responsible for determining the data package and associated data fee.
2. Greenfield areas are identified by the Geological Agency, as a point, with no boundary. Such areas have some data and good prospectivity, but may not have Inferred Resources. Government enterprises and private parties may apply to register an interest. Thereupon the parties may team up with a local university, SOE, Geological agency or other approved party to undertake exploration at the interested parties’ cost. The data is to be provided to the Geological Agency, and included in the data package / fee for bidding. Thereafter the party has the “right to match” bidders for this prospect. The agency is working on means to publicize these Greenfield areas. See accompanying maps.
Apparently only 2 areas have been auctioned to date, being the two nickel areas taken up by PT. Aneka Tambang, that were later disputed by the local government. There are also industry whispers that some parties are working along the Greenfield path with local parties. It would seem both of these options has not drawn much interest from the public, and local government BUMN, BUMD’s also are unwilling to commit to either of these options.
Future implementing regulations are looking at: 1) Change the bidding process to be more in line with the new centralized regulation, and 2) Establishing the criteria for issuance of new areas, including the possibility to reduce or cancel the data fee, and bypassing the need to have prior established inferred resources.
Note that non metallic minerals and rocks continue to be issued by the Governor’s without a bidding process.
REE
In 2019 the Geological Agency issued a booklet [POTENSI LOGAM TANAH JARANG DI INDONESIA] on the potential of Rare Earth Elements (REE/ LTJ) in Indonesia. This booklet discusses geology and genesis, exploration, potential (resources and reserves, availability and indications) and policies government in the management of rare earth metals (LTJ) and includes a location map. Only about 8 of the 29 identified REE locations have some early exploration data, with the rest (70%) to became future targets of the Geological Agency. See; https://geologi.esdm.go.id/assets/media/content/content-potensi-logam-tanah-jarang-di-indonesia.pdf
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1:50,000 Scale Mapping.
Exploration targeting relies heavily on the 1;250,000 scale published geological maps. These maps make one layer of the free digital “One Map” that appears on the Mines Department’s web site. The Geological Agency (survey division) is working towards developing the next generation of national mapping at 1:50,000. The work is based upon newly acquired satellite imagery, and may take advantage of industry reports submitted to the government, along with historical surveys undertaken in collaboration with various countries. The Geological Agency has a long history of collaborating with Japan (JICA) and other nations.
Some years ago, the British Geological Agency undertook a stream sediment survey over all of Sumatra, while other nations undertook joint surveys in Kalimantan, Java and other places. Presently the Geological Agency is talking with Australian parties for options to collaborate in the critical mineral’s areas. The Geological Agency is also keen to include undersea geological mapping, particularly areas such as the Banka / Billiton alluvial tin areas, along with submarine volcanoes etc. Airborne geophysical surveys (magnetometer, radiometric etc) are being considered. The Geological Agency has undertaken a variety of geological surveys, including geochemical and geophysical surveys in Sulawesi, East Nusantara and other places. This wealth of historical data is yet to be merged with more recent data into a single Geological Agency digital data system, or placed on the Mines Departments “One Map” for free public access.
See; https://geologi.esdm.go.id/geomap and select Koleksi Peta to scroll down to find several 1:50,000 scale geological maps, along with many other geological and geophysical maps etc. It is estimated more than 3,000 map sheets are needed to cover Indonesia at 1:50,000 scale.
Conclusion
It is hoped that better use of existing data through digitization, closer integration between the various divisions, along with increased work budgets can lead to increased output. The Geological Agency now process only 10 projects a year, but perhaps 20 or 50 projects a year is required. Such higher numbers may be needed to match the global success range of only 2 or 3% of projects that make it to mining.
The new regulations requiring registered Competent Persons to submit company geological data via the internet is a great step forward. This requires the Geological Agency develop a system to incorporate & interpret this data into a useable format that will contribute to updating geological maps as well as compiling numbers of resources & reserves.
The Geological Agency has diligently been preparing new areas for exploration. The lack of offering such areas to the public is a strong indicator that the Mines Department has apparently little confidence that such offerings are not an attractive business opportunity for the investing public.
For many years, the Geological Agency has been working diligently in the background, with limited resources, to set the bases for the ongoing exploration industry. The present commodity boom and post Covid 19 need to stimulate national growth, may encourage greater support to the Geological Agencies work to stimulate new projects for immediate growth of the Exploration industry, along with the long-term growth of the mining sector.