Jakarta – Indonesia said yesterday that a number of mining companies have suspended exploration due to uncertainty over new regional autonomy laws and warned that this could hit the economy.

"We have letters from some mining companies, both local and foreign, including Newmont, saying that they are suspending their activities for between one and two years, awaiting developments over the legal aspects," Mines and Energy Minister Purnomo Yusgiantoro told reporters. Newmont Mining Corp runs two major mines in Indonesia.

"The companies that are already producing continue to operate," he said. Firms in the exploration stage were shutting down operations. "This not only threatens future mining activities but also has an economic multiplier effect on the regions with mining sectors," he said.

Under new autonomy laws, the legal system for the mining sector falls under the control of regional governments. There is considerable confusion over how the new system will work and the central government has said it wants to keep hold of the crucial mining sector for up to five years.