• Permits for 28 companies stripped for environmental violations
• Deforestation linked to deadly Sumatra floods
• Environmentalists say firms should be forced to restore forest

JAKARTA, Jan 21 (Reuters) - 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.

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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 (INRU.JK) , opens new tab.

HYDRO PLANT ACCUSED OF ECOLOGICAL DAMAGE

NSHE, 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 legal rights.

Previously, Agincourt said that attempts to link its operations to the disaster last November were "premature".

It was not immediately clear what the revocation of the permits would mean for the future of the projects.

GOVERNMENT DECISION IS 'FINAL'

The government's decision is "final", but companies can discuss with related government agencies about the future of their assets, said Barita Simanjuntak, spokesperson for Indonesia's military-backed forestry task force which investigates the companies.

"What the companies did is very serious, it has a correlated impact that worsened the disasters," Barita said, adding that some companies were found to have operated outside their concessions, while some had encroached on river banks that should have remained untouched.

Environmental group WALHI has called on the government to make sure the companies rehabilitate the degraded forests, said director executive Boy Jerry Sembiring, adding that the assets should not be transferred to other owners.

From 2001 to 2024, Sumatra has lost 4.4 million hectares (11 million acres) of forest, an area bigger than Switzerland, according to David Gaveau, the founder of deforestation monitor Nusantara Atlas.

Striking images of hundreds of logs washed downstream by flood waters last year caused uproar amongst locals and Indoensians from across the archipelago.

https://www.reuters.com/sustainability/climate-energy/china-backed-power-plant-astra-gold-mine-lose-permits-indonesian-environmental-2026-01-21/