II.

LITERATURE REVIEW

Rehabilitation bonds and bank guarantees are broadly accepted as

instruments available to governments to ensure completion of rehabilitation of
mined areas. Bond and guarantees are seen to provide a financial incentive for the
proper completion of rehabilitation work and to ensure that the cost of
rehabilitation will be met by the miner rather than through public funding (McGill
and Fox, 1998).
Several terms are commonly used to express this bond and guarantees
including rehabilitation guarantee, rehabilitation bond, reclamation bond,
performance bond etc. In this case, the differences between rehabilitation bond
and reclamation bond merely by the author to distinguish between the name of
application and the Government Provisions which has legal aspect. The Mining
Rehabilitation Bond System is designed to support decision making of
Reclamation Bond.

2.1. Reclamation Bond Provision

According to Director General of Geological and Mineral Resources
Decree number: 336.K/271/DDJP/1996 concerning Reclamation Bond, asserted;
“Reclamation Bond is a definite fund, which is provided by a mining company as
a guarantee in conducting reclamation on mined area”, though “reclamation is an
effort to restructure and improve condition upon a disturb land that is impacted by
mining operation to fit either with previous or divert land use to be more useful
one”, and “the adequate amount of bond is based on annual company planning
pertain mined area reclamation for every five years period, with the premise
would be conducted by the third party”.
Realization of Reclamation Bond is based on the “Guideline of
Established Annual Planning of Environmental Management regarding
Determining of Reclamation Bond (DEMR, 1996)”. The components of
Reclamation Bond could be classified into two main components those comprise
of direct and indirect costs regarding establishment of company annual
environmental management as basic of estimation.

13
2.1.1. Direct Cost Component

The cost is prepared to cover mine facilities removal, material handling,

re-vegetation, and supporting efforts for post mining condition; erosion control,
acid mine drainage mitigation.

2.1.1.1. Mine Facilities Removal

This cost is proposed for removing or demolishing and disposal of any

supporting facilities of mining operation, if not any exception for post mining
usage of a certain items. There is not any specific calculation method could be
implemented to whole mine facilities removal, since that almost developed by
civil work. The structure demolition, disposal cost and equipments are decisive
driven by their physical characteristics such as material types, foundation, and
dimension.
Table 2.1 The commonly material used and the removal cost (Means, 2000)
Material Structure Based Type Cost ($) Units
Bricks 5 m3
Concrete 6 m3
Metal 5 m3
Iron Pipe / Water Channel 2.50 m3
Belt Conveyor 38.00 Ft
Wood / Electricity Pole 250 Ft
Wires 3.00 Ft
Shaped Concrete / Foundation 2.67 Ft

Table 2.2 Relevant building and specific construction in a mining operation

(Means, 2000)
Building Based Types Specific Based Types
Offices Foundations
Warehouse Belt Conveyor
Workshop Railway
Fuel Tank Water Channel
Primary Processing Bridges
Secondary Processing Electricity Transmission
Stacker Poles
Loading Facility Fences

14
 According to Means (2000), the structure demolition and disposal cost is
based on the material type in certain units as shown on Table 2.1, and the
common building and other specific types that relevant to be built in a mining
operation. The common material used and the removal cost is shown in Table 2.2.

2.1.1.2. Material Handling Plan

Land structuring or earthmoving consists of several operations, i.e. back

filled of mined area, re-contouring, top soil spreading, erosion and surface water
controls.
a. Earthmoving
The material-handling plan is determined by estimation of material
volume to be done, haulage distance, road grade, and employed equipment
types.

1) Waste rock volume estimation

Determination of material amount that must be handled
(earthmoving volumes calculation) uses standards engineering methods.
Volume calculation can be obtained by comparing the pre-reclamation and
post-reclamation topography of the site. A series of pre-reclamation and
post-reclamation cross sections can be used to calculate volumes by the
average-end-area method as follow:
i=n

V = ∑{[(A(i)+A(i+1))/2]*Li +…..+[(A(n-1)+A(n))/2]*L(n-1)} ........1)

i=1

V : Volume
Ai : Area of cross Ai section.
Li : Length between the section of area A (i) - A (i+1).
n : Number of section
Material volume is defined according to its state in the earth
moving process. There are three volume measurements, which are bank of
cubic meters (BCM), loose cubic meters (LCM), and compacted cubic
meters (CCM), which driven by a swell factor. Swell is the volume
increasing resulting from a change of bank state to loose state. Some
equipment manuals refer to a load factor, which is the loose density

15
 divided by the bank density. The following equation is used to determine
the swell factor.
SF = [100 / (LD / BD)] – 100 ……….………………………………….. 2)
SF : Swell Factor
LD : Loose Density
BD : Bank Density

Table 2.3 Initial and final swells of selected material

Material Types Initial Swell (%) Final Swell (%)

Mixed waste rock 25-45 10-25
Siltstone 35-45 10-25
Sandstone 60-70 25-45

2) Haulage distance estimation

Haulage distance estimation is based on the reclamation and
operation plans of the permit application. This includes haul-roads and
routes designation for each area where backfilling, grading, topsoil
replacement, or other earth moving activities occurred, identify the
approximate centroid of each source material and its destination, and
determine the centroid-to-centroid distance. Centroid is a surface
expression of the center of mass.

3) Grade estimation
Haul road grade and its surface roughness conditions greatly
impact equipment productivity and may confine the type of equipment to
be employed. Most equipment productivity and guideline express these
limitations in term of the total resistance of the haul, which is the sum of
the rolling resistance and grade resistance.
TR = RR + GR ……………………………………………………….. 3)

TR : Total Resistance
RR : Rolling Resistance
GR : Grade Resistance

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4) Equipment selection
The following are the principle process in selecting appropriate
equipments.
• Determines types of equipment such as bulldozer, scraper,
excavator, dump truck, loader, grader or dragline.
• Determines model and capacity of equipments based on the
reclamation plan information; concerning land management,
material handling, and manual of equipments.
5) Land management
The land management in order to meet the reclamation plan has to
select the appropriate equipment that is efficient and effective. Typical
earthmoving activities together with equipment needed are described
bellow.
• Spoil ridge reduction: to move tops of the spoil ridges into the
valley between the ridges, the operations normally rely upon
bulldozers.
• Final pit/highwall elimination; to fill the last pit with material,
which its sources obtained from such following area.
- Adjacent spoil ridges or the area above the highwall, these usually by
using bulldozer.
- Overburden stockpile; normally uses scrappers or combination of
loaders and trucks to move material to the pit. When trucks and loaders
are used, bulldozers spread the material in the pit area. If the pit is going
to be reconfigured for retention as a permanent impoundment,
bulldozers are normally used to reduce the highwall and spoil slopes into
acceptable grades.
• Final grading; to re-contour backfilled area, excess spoil disposal
structures and other disturbed areas, to facilitate proper drainage
and the approved post mining land use and to prepare disturbed
areas for topsoil redistribution These usually use scrapers,
bulldozers and motor graders. In some cases, especially for sites
formerly used as roads or support facilities, ripping with bulldozers

17
 may be required to reduce compaction in the root zone and provide
a slightly rough surface to enhance topsoil adhesion.
• Topsoil redistribution: this considers soil horizon placement, soil
depth, compaction, and drainage systems. The choice of equipment
depends on grade, the haulage distance between stockpiles and
placement areas, and the volume of material to be moved. These
normally involving the use of scrapers, front-end loaders, trucks,
bulldozers, and/or graders.
• Removal of diversions and siltation structures: to grade out
diversions and excavated siltation structures, generally bulldozers
is adequate to be used. In some cases, a hydraulic backhoe
excavator or small dragline is required to dredge accumulated
sediment.
• Covering of coal mine waste or other acid-toxic forming materials
exposed: when the reclamation and operation plans require the
application of cover material prior to revegetation, the similar
equipment considerations as the topsoil redistribution activities
discussed above apply to the transport and distribution of this
material, i.e. include the covering of coarse coal mine refuse, slurry
impoundments and coal stockpile pads.

b. Productivity and Equipment Cost Calculations

The development of the materials handling plan requires a

determination of equipment productivity and earthmoving costs. Generally,
the productivity of certain equipment is expressed in cubic meter per hour.
Several factors relates to equipment productivity are capacity, cycle time, site
conditions, and material characteristics. Actually, reclamation activities do not
operate at 100% efficiency, it relies on complex factors such as operator skill,
repairing and adjustments, and personnel and job layout delays. Human factor
either addressed individual factor as part of the operator factor or combined in
an Efficiency Factor. Despitefully, the site-specific conditions are as decisive

18
factors. The total hours of an equipment usage determined by applying
productivity rates to the amount of material removed.
The following are several formulas related to the capacity estimation
for dozing, excavating, loading, and hauling of certain equipment to be
adjusted with the selected equipment specification.
1) Estimation of Bulldozer production capacities
q * 60 * b
Q= …………………………………..……. 4)
(D/F) + (D/R) + Z

Q : Production capacity (m³/hour)

q : Blade capacity (m³)
b : Blade factor
D : Dozing distance (m)
F : Forward speed (m/mnt)
R : Reverse speed (m/mnt)
Z : Transmission (mnt)

2) Estimation of Excavator production capacities

q * 3600 * e
Q= …………………………………...……. 5)
Ct

Q : Production capacity (m³/hour)

q : Bucket capacity (m³)
e : Correction factor
Ct : Cycle time (sec)

3) Estimation of Dump Truck production capacities

q * 60 * d
Q= ………….......…… 6)
(n*Ct) + (D/V1) + (D/V2) + T1 +T2

Q : Production capacity (m³/hour)

q : Haulage capacity (m³/hour)
d : Correction factor
n : Loading rate number
Ct : Loading Cycle time (sec)
D : Haul distance (m/)
V1 : Haul speed (mnt)
V2 : Empty speed (m/mnt)
T1 : Dumping time (mnt)
T2 : Position time (mnt)

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 4) Estimation of Wheel Loader production capacities

q * 60 * w
Q= ………………………………...……. 7)
(D/F) + (D/R) + Z

Q : Production capacity (m³/hour)

q : Bucket capacity (m³)
w : Correction factor
D : Loading distance (m)
F : Forward speed (m/mnt)
R : Reverse speed (m/mnt)
Z : Transmission (mnt)

Table 2.4 Heavy Duty / Construction Equipments Rental Prices

(APKASI, October 2005)
Prices / Unit ($ US)
No. Types Capacity Per Month /
Per Hours
210 Hours
1 Bulldozer 160 HP 6430 32
2 Bulldozer 200 HP 8064 40
3 Bulldozer 320 HP 12860 64
4 Bulldozer 425 HP 17161 86
5 Wheel Loader 1.5 m3 3871 19
6 Wheel Loader 2.5 m3 4516 23
7 Wheel Loader 3.0 m3 4710 24
8 Wheel Loader 4.0 m3 9419 47
9 Track Loader 2.3 m3 4301 21
10 Track Loader 2.8 m3 5161 26
11 Motor Grader 135 HP 5054 25
12 Motor Grader 150 HP 5591 28
13 Hyd Excavator 0.5 m3 3527 18
14 Hyd Excavator 0.9 m3 4516 23
15 Hyd Excavator 1.5 m3 6279 31
16 Hyd Excavator 2 m3 8344 42
17 Hyd Breaker 3000 9763 49
18 Back Hoe Loader 0.3 – 1 m3 3720 19
19 Dump Truck 20 Ton 3048 17
20 Dump Truck 12 Ton 2903 14
21 Dump Truck 8 Ton 1935 10

The required cost for material handling is based on the equipment

productivity and number of equipments used, whether individual or/and
combinations. While to determine the hourly cost of equipment during
operation; it can adjust the components of the hourly costs in the Cost

20
 Reference Guide for Construction Equipment, for the number of shifts, oil and
fuel costs, etc.

Table 2.5 The Average of Heavy Equipment’s Lubricant and Fuel

Consumptions

Consumption (Unit/hr) Prices/

No. Oil Type Unit Unit
Excavator Bulldozer ($ US)
1 Fuel Ltr 0.14 22.5 0.7
2 Engine Oil Ltr 0.108 0.1 2.5
3 Final Drive Oil Ltr 0.007 0.04 2.5
4 Hydraulic Oil Ltr 0.075 0.11 2.5
5 Swing Machine Oil Ltr 0.007 - 2.5
6 Transmission Oil Ltr - 0.15 2.5
7 Grease Kg 0.07 0.02 3.0

2.1.1.3. Re-vegetation

The initial re-vegetation process generally consists of seedbed preparation,

including application of soil amendment to improve soil quality, seeding,
planting, maintenance, and monitoring. The reclamation plan will specify the soil
condition and specific plantation, which has been agreed. Generally the cost of
each revegetation activities is determined per hectare.

2.1.1.4. Other Direct Reclamation Cost

Other direct reclamation cost depends on the site conditions and applicable
requirements of the reclamation and operation plans, other necessary reclamation
activities may include:
• Pumping and treating impounded waters
• Replacing wetlands
• Sealing underground mine entries and openings
• Plugging auger holes
• Sealing monitoring wells and other drilled holes.
• Constructing rock drains.
• Disposing of toxic, hazardous, and other solid (non coal) waste.

21
 • Maintaining roads during reclamation including grading, surfacing, ditches
and culverts.
• Maintaining ponds.
• Evaluating and rehabilitating structures to be retained as part of the post-
mining land use (ponds, roads, diversions, etc).
There is no established method of estimating costs for most of these
activities; therefore a case-by-case basis calculation by using professional
judgment is needed.

2.1.2. Indirect Cost Component

This cost is non-technical fund, which proposed to support the realization

of reclamation planning.

2.1.2.1. Mobilization and Demobilization of Heavy Equipments

Mobilization and Demobilization (mob-demob) of heavy equipments is an

allowance for the cost of moving equipment, to and from the reclamation site. The
cost will be varied depend on such condition:
• the type and number of equipment,
• the haul distance to the site,
• the needing for special equipment;
• the presence of non standard features or condition,
• the remote location
• a necessity of separate mob-demob at a later one.
Generally the cost is range up to 10% of the total direct costs in
accordance with its constraint that should be recognized, and normally is
determined 2.5% of direct cost.

2.1.2.2. Reclamation Planning

The cost of reclamation planning is addressed to engineering redesign cost,

in the event of bond forfeiture; due to the plans in the permit application may be
not reflect site conditions at the time of bond. Necessary activities may include:
• Preparing maps and plans to show the extent of required reclamation.
• Surveying topsoil and overburden stockpiles to determine the amount of
material available.

22
 • Analyzing topsoil and overburden stockpiles to determine whether special
handling is necessary.
• Evaluating structures to assess the difficulty of demolition and removal.
• Evaluating impoundments and roads to determine any special reclamation
needs (such as the presence of toxic materials), the feasibility of leaving
those structures in place, and the reclamation needed to ensure stability
and facilitate the post mining landuse.
• Assessing the condition of area reclaimed by the permitee to determine
whether additional work is needed to complete the reclamation plan.
• Preparing contract documents.

Figure 2.1 The relationship of reclamation planning cost and Direct Cost

Based on the manual chart of “Englemen’s Heavy Construction Cost File”

(on Handbook for Calculation of Reclamation Bond Amounts - OSM US
Department of the Interior, 2000), the cost of reclamation plan generally allocate
in between 2.5%-6.0% of direct cost, whilst DEMR has been determined in
between 2%-10% as shown on Figure 2.1. The following formula is derived from
this chart.

Y = exp(13.8155105579643-1.15129254649702X) ; or
(LN(Y))=13.8155105579643-1.15129254649702X .............................. 8)
Y : Direct Cost
X : Percentage of Reclamation Planning cost

23
2.1.2.3. Administration Cost and Contractor Profit

The reclamation plan is designed likely to be conducted by a third party,

thus overhead and profit for the contractor as reclamation doer have to be included
in bond amount. This allowance is needed to anticipate when an uncertainty event
or in default condition occurred.
Based on the manual chart of “Englemen’s Heavy Construction Cost File”
(on Annual Plan of Environmental Management for Reclamation Bond, DEMR),
the overhead and profit costs related to the direct cost is in between 3%-14% as
classified follow:

• for Y≤ 21000, then X=14, and

• for Y≥ 100000000, then X=3, else
• for 21000 < Y < 100000000, then X is determined by the following
equation;

Y= exp(20.7232658369464-0.767528364331349X), or
(LN(Y))=20.7232658369464-0.767528364331349X ……........………..9)
Y : Direct cost (US$ million)
X : Overhead and profit (%)

Figure 2.2 The relationship of overhead and contractor profit and Direct Cost

24
2.1.2.4. Management Cost

Reclamation management cost is addressed to hire an independence

project management firm related to inspect and supervise the reclamation
contractor work performance. Some activities may include as additional work,
such as dam inspection.

Based on the manually chart of “Englemen’s Heavy Construction Cost

File” (on Annual Plan of Environmental Management for Reclamation Bond,
DEMR), the fee is in between 2%-7% related to the direct cost is configured in
equations and shown on chart below.

• for Y≤ 10000, then X = 7, and

• for Y≥ 100000000, then X = 2, else
• for 10000< Y < 100000000, then X is determined by the following
equation;

Y = exp(22.1048168927428 - 1.84206807439524X), or
(LN(y)) = 22.1048168927428 - 1.84206807439524X …………………10)
Y : Direct cost (US$ million)
X : Reclamation management cost (%)

Figure 2.3 The relationship of reclamation management cost and Direct Cost

25
2.1.3. Determining the Total Performance Bond Amount

Reclamation cost is total amount of direct and indirect cost components,

whilst the Reclamation Bond is determined for its five years period. Therefore
actual reclamation cost as the first annum bond must be in detail, and the
calculation of each component can be expressed in a certain price per units. In the
absence of major changes to the reclamation and operation plans, accordingly
without redoing the both calculation, the cost of remaining fourth years can be
estimated by considering a predicted annually escalation price or inflations.

Rc = DC + IC .……………………………………………………….…11)
RC : Reclamation Cost
DC : Direct Cost
IC : Indirect Cost

i= 5

Rb = ∑[(1+E(i))*Dc(i) + IC(i)] ........................................................12)

i=1

Rb : Reclamation Bond
Ei : Escalation year i
Dc(i) : Direct Cost year i
IC(i) : Indirect Cost year i

2.2. Decision Support System

Decision theory is an essential branch of operations and resource

management and its methodology has been developed at the intersection between
applied mathematics and computer engineering. In the past, decision processes
were considered to be simple rational mathematical optimizations, based on linear
programming and graphical techniques. However, this oversimplification resulted
in system representations which were far from real conditions and consequently of
limited practical application. Since the end of 1950s, the Nobel prize-winner H.
Simmon introduced the need to human capacity to process it. Simmon suggested
the formulation of realistic goals that reflect satisfactory solution instead of
optimal ones, and proposed adapting the decision procedure to human heuristic
behavior, by introducing the concept of three interactive and iterative phases:
intelligence, design, and choice phases. Together with the introduction of
information technologies, decision theory has evolved and brought the

26
construction of integrated Decision Support Systems (Hernandez and Carnelli,
1996).
Decision making can be a complicated process, because decision makers
are faced with an ever-increasing number of alternatives, the relationships
between the variables involved are complex, and frequent changes are occurring.
Decision often must be made under time pressure, and several decisions may be
interrelated (Turban, 2003).
Turban (2003) stated that Decision Support System (DSS) is a computer
based information system that combines models and data to provide support for
decision makers in solving non-structured and semi-structured or interdependent
problems with extensive user involvement. DSS consist of the following four
main components; Data Management, User Interface, Model Management, and
Knowledge Management subsystems.

Figure 2.4 The DSS conceptual model, showing four main software components
facilitated by other parts of the system (Adapted from Turban, 2003).

27
2.2.1. Data Management

The data management includes a specially constructed database or set of

files that contain relevant data for the decision situation and is managed by a
database management system (DBMS). Data can also be obtained directly from
the corporate data warehouse, from regular databases, or from other sources.

2.2.2. Model Management

Model management includes software with financial, statistical,

management science, or other quantitative models. These provide the systems
analytical capabilities and an appropriate software management program to
manage the models. Some of the models are preprogrammed, while others are
built by the DSS builder or end user.

2.2.3. Knowledge Management

The knowledge management subsystem can support any of the other

subsystems or act as an independent component, providing knowledge for the
solution of the specific problem. This subsystem is available in only some DSSs.

2.2.4. User Interface

The user interface subsystem enables the user to communicate with and
command the DSS. Most DSSs have graphical user interfaces.

28
 III. METHODOLOGY

This section describes the materials and the methods used in designing,
creating and implementing Mining Rehabilitation Bond System of a mining area.

3.1. Time and Location Selection

The research has been conducted from April 2005 to January 2006 at
Department of Energy and Mineral Resources (DEMR), Jakarta and MIT
Research Laboratory, SEAMEO-BIOTROP, Bogor.
For the purpose of the research, PT. Newmont Nusa Tenggara (NNT) was
used as study case (Figure 3.1), as suggested by DEMR, therefore the data was
collected from this company as well. This is a surface mining company that
exploits copper and gold located at Batu Hijau, West Sumbawa Regency - West
Nusa Tenggara Province. It has almost 1,900 ha opening area, which consists of
28 ha main pit and supporting area for the rest, where should has warranty to
manage annually.
The research area is delineated and focused on the development of DSS
for determining Reclamation Bond of PT NNT. This system is supported by
company mining data whether technical, non-technical, spatial, non spatial, and
financial, which are manipulated and presented by using some empirical formula
on a database and model based management systems.

Figure 3.1 The Mining Company PT Newmont Nusa Tenggara Location Map

29
3.2. Material and Tool
3.2.1. Hardware and Software Required

As an integrative system, DSS tool is constructed by several components.

This tool can properly work on recommended hardware below, perhaps with lack
of weakness and troubleshooting.
a. Required Hardware.
• Desktop PC with Windows XP Home Edition OS
• Processor : Pentium III 450 MHz
• Memory : 128 MB of RAM
• Storage : 40 GB
• Plotter HP Design-jet 500 PS Pantone Digital Color
• Printer HP Desk-jet 3535
b. Software, to build the prototype of DSS tool by integrating some of the
software, i.e.:
• Microsoft Visual Basic 6.0
Used for coding and constructing the prototype of DSS tool as the
product of spatial information system.
• Microsoft Access
Powerful ‘Microsoft’ database application software, which is part of
Office Suite, used to store and retrieve reclamation data.
• ESRI Arc View 3.2
This software used in spatial data preparation such administrative map,
mining location map, road map, contour map, geological map, etc
• Esri MapObject 2.1
This ESRI’s product combined with Microsoft Visual Basic 6.0 used
for building map application.

3.2.2. Data Requirement

Data required in this study consist of spatial data of project area which
gathered from National Survey and Mapping Agency (BAKOSURTANAL) and
DEMR and non spatial data gathered from reclamation division of DEMR.
a. Spatial Data
• Project Area Contour maps on scale 1:10.000
• Project Area Geological maps on scale 1:10.000

30
 • Mining Project Area layout map on scale 1:5.000
• Reclamation Planning Project Area map on scale 1:5.000
b. Non Spatial Data
• Technical Data
- Soil and rock types
- Slope (in percent) and distances (in kilometer) between any mining
facilities, usually used to determine material handling equipment
movement
- Building dimensions (in cubic meter) with material types (brick,
concrete, metal, iron pipe, belt conveyor, wood, wires, etc) and
physical structure characteristics, in order to determine mine
facilities removal
- Heavy equipment types (dozer, ripper, excavator, grader, loader,
scraper, dump truck, etc)
• Non Technical Data
- Specification of vegetation
- Price list of Heavy equipment rental
- Cost of specific material and the removal
- Price list of specific vegetation
- Price list of fertilizer
- Price list of fuel, oil and lubrication
- Additional banking information (billing rate, inflation rate, etc)
c. Missalaneous Data
• Administrative; province and regional boundary map on scale
1:250.000 (BAKOSUR- TANAL, 1999)
• Road and river map on scale 1:250.000 (BAKOSURTANAL, 1999)
• Mining companies location and information
Administratively, PT.NNT is located at Batu Hijau, West Sumbawa
Regency of West Nusa Tenggara Province. It has almost 1,900 ha opening area
that consists of 28 ha main pit and the rest for supporting area, where should has
warranty to manage annually. Technically, this is a surface mining company that
exploit copper and gold. The data used for this research was acquired from DEMR
in form of hard copy of mining company program in proposing their Reclamation
Bond.

31
3.3. Method
In order to develop reclamation bond computerized base system is need to
breaking down problem into its component parts, examining those parts, and
reconstituting them into a more efficient, effective whole. The systems analysis
reclamation bond phase examines and documents the existing processing
environment, examines the opportunities and alternatives, and develops the
requirements for change.

3.3.1. General Concept

The general concept of Reclamation Bond determination can be figure out

as seen on Figure 3.2. In principle, a mining company has to consider and
compliance technical, economical, and environmental aspects in conducting
activities. Therefore any steps of exploitation especially related to the spatial
management are warranted to reclaim by saving a Reclamation Bond, which has
been agreed by the government both of amount and the Bank.

Figure 3.2 The general concept flowchart of Reclamation Bond mechanism

The process to determine Reclamation Bond has closed relationship with

exploitation activities as well, since almost of anything that have been built and

32
opened over on mining concession have to be demolished and reclaimed. The
mining operation will be started when the bond is saved, as the recommendation,
and it would be liquidated for area of reclamation when the company stopped the
operation.
Based on Figure 3.2 above, the process of mining operation consists of
two major planning for their whole activities, i.e. exploitation planning and
reclamation planning. Both planning needs cost calculation, this to accomplish
feasibility study and fulfilling the government’s agreement. As described before,
the saved Reclamation Bond will be released soon after memorandum of
exploitation activity agreed and followed by reclamation plan.

3.3.2. Legal Aspect

Legal aspects related to Reclamation Bond are:

• Act of the Republic of Indonesia Number 11, Year 1967 concerning The
Basic Provision of Mining.
• Government Regulation Number 75, Year 2001 concerning Second
Change of PP. Number 32, Year 1969 concerning Implementation of Act
No. 11, Year 1967 concerning The Basic Provision of Mining.
• Decree of Minister of Energy and Mineral Resources Number
1453.K/29/MEM/2000 date 3 November 2000 concerning Technical
Guidance of Government Duty in General Mining.
• Government Regulation of the Republic of Indonesia Number
1211.K/008/M.PE/1995 concerning Prevention and Management of
Environmental Contamination and Damage of General Mine Activities.
• Decree of Director General of Geological and Mineral Resources Number
336.K/271/DDJP/1996 concerning Reclamation Bond.

3.3.3. Decision Support System (DSS) Analysis

3.3.3.1. Conceptual Process

The concept of the Mining Rehabilitation Bond System process from input
becoming output could be figured out as shown on Figure 3.3. In brief
explanation, this divided into input stage, activities stage, processing resources
and output stage as end product.
Starting from input which is divided into: 1) disturbed area, consists of
physical and spatial data, material resources which coming from mine planning
activities, engineering consist of mine working components, and 2) vegetation

33
type, which consist of characteristic of specific plant for re-vegetation activities.
Activities stage consist structure demolition and structure disposal, earth moving
and re-vegetation whereas need supply data from input data. Then processing
stage consists of financial accounting process to produce the amount of
Reclamation Bond.

Figure 3.3 Conceptual of Input-Output Process in Reclamation Bond

Determination

3.3.3.2. User Need Analysis

One stage before constructing DSS tool for Reclamation Bond is analyzing
user needs. Here, important aspect specifies users and their limitation in using the
system. In general, there are three main users included Government, Enterprise
and Public. Those can distinguish based on their access authority, as follows;
ƒ Administrator
The administrator is the DEMR, Provincial or Regional Officers, who has
full accessibility to handle the whole systems, include the database in term
of periodical monitoring reports of mining activity and giving mark of
final evaluation regarding to their performance.
ƒ Applicant
The applicant here is Enterprise or Mining Company, who has access and
responsibility for actual Reclamation Bond data input, which calculated by
company.

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 ƒ Guest
The Guest is public, mining association or mining community as observer.

Figure 3.4 Diagram of User Needs Analysis

3.3.3.3. DSS Construction

The DSS comprises 2 (two) main parts namely Direct Cost and Indirect
Cost. The DSS construction is presented in the flowchart as shown in Figure 3.5.

Figure 3.5 Flowchart of DSS Construction

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 The Mining Rehabilitation Bond System is designed to support decision
making, in order to minimize DSS implementation, data base manipulation
through Visual Basic programming language. Beside direct cost analysis and
indirect cost analysis, there is also manual analysis to perform additional data for
structure demolition calculation and earth moving activities. This process can be
handled directly by mining company itself or DEMR as necessarily. The main
focus of this system design is to estimate the amount of escalation per year that
have to meet mining company’s reclamation cost planning.

36
 IV. RESULT AND DISCUSSION

This chapter will describe how reclamation model is simulated. The

implementation of several formula of reclamation model, which is combined with
mined existing data and supported also with spatial data can be seen more
confidence. This chapter discusses about selecting hardware, software, and
implementing the prototype as well as coding, user interface design, and testing.

4.1. System Analysis

4.1.1. Database Design
Database design explains interconnecting among data to user guidance
performance. Database design of rehabilitation bond is figured out as flow of
process in conceptual, logical and physical model.
Connolly and Begg (2002) explained that methodology design consists of
phases, where each phases containing a number of steps, which guide the designer
in designing. It also helps the designer to plan, manage, control, and evaluate
database development projects and structured approach.
4.1.1.1. Process Modeling
Process modeling describes relation between user and system, which is
represented by data Flow Diagram (DFD). DFD describes user identification and
the needs throughout context diagram (Figure 4.1). Moreover DFD can be
derived in several levels of connection and relationship (Figure 4.2).

Figure 4.1 Rehabilitation Bond Context Diagram

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 It shows context diagram where user of system interact each other based
on their accessibility. Mining company is the main user who is responsible in
inputting data by submitting reclamation report (include plan, action and cost
expenditure) periodically to DEMR. Mining Company here is not only being
categorized as Contract of Work for mineral mining (Kontrak Karya / KK), but
also Mining Authorization Holders (Kuasa Pertambangan / KP) and Work
Agreement for Coal Mining Enterprises (Perjanjian Karya Pengusahaan
Pertambangan Batubara / PKP2B). Mean while public is categorized as mine
society who can observe the information.

Figure 4.2 Rehabilitation Bond DFD Level 1

4.1.1.2. Conceptual Model

Connolly and Begg (2002) stated that phase of conceptual design started
from conceptual data model, which is independent of implementation details such
as the target of DBMS, application program, programming languages, hardware
platform, performance issues, or any other physical consideration.

38
 A Conceptual model describes the essential semantics of system data. A
conceptual model consists of a number of symbols joined up according to certain
conventions. Commonly, conceptual modeling use symbols from a modeling
method known as entity-relationship analysis. This method was first introduced
by Chen in 1976 and now is widely used (Hawryszkiewycz, 1994).
The question lifts when meet conceptual model such the description of
declarative and reusable way the domain information of an application,
vocabulary relevancy, and constrain data uses. The Entity Relational Diagram
(ERD) of Rehabilitation Bond System followed in Figure 4.3.

Figure 4.3 Rehabilitation Bond ERD

There are three major part of ERD above, which are Entity with
independent physical existence, Attribute with property of entity, and
Relationship with key of interaction. Figure 4.3 draws the correlation of each data
which has relation one data to one another data, one data to many others, and also
on the contrary. “Administrator” entity and “Applicant” entity have different kind
of relationship (evaluating and reporting).

39
4.1.1.3. Logical Model
Logical model is construction process where the model is presented as
logical perspective of database. Usually logical model figured database structure
in Data Description Language (DDL). Shekhar et al (1999) explained that logical
modeling phase is related to the actual implementation of the conceptual data
model in database management system. Logical model identifies the requirement
of data. The logical model Rehabilitation Bond Model followed on Table 4.1.
Some of mine activity for reclamation purposes categorized in direct cost entities
and indirect cost entity.
Table 4.1 Rehabilitation Bond logical data model
No. Category Entity Attribute
1 User Administrator Admin_id, Admin_name
Admin_Field, Password
Applicant Applican_id, Applican_name
Applican_Field, Password
Guest Guest_id, Guest_name
Guest_Field, Password
2 Company Company Profile Company_id, Company_name
Mining_type, Address, State
3 Direct Cost Material Handling Company_id, Year
Cost Earthmoving_act, Equip_name
Equip_type, Fixed_cost
Labour_cost, Total_OH, Total_cost
Material Handling Company_id, Year, Activity
Summary Volume, Origin, Destination
Distance, Grade, Equipment
Equipment Price Equip_id, Equip_type
Capacity, Price_per_month
Price_per_hour
Facility Removal Cost Company_id, Year, Item,
Material_type, Volume,
Cost, Demolition_cost
Revegetation Cost Company_id, Year
Component, Sub_component
Unit, Needs, Unit_cost,
Revegetated_area, Cost
Other Reclamation Cost Company_id, Year
Item, Cost
4 Indirect Cost Indirect Cost Company_id, Year, Item,
Mobilization, Volume,
Administration, Management
Reclamation_plan
5 Other Total Cost Company_id, Year
Total_direct_cost
Total_indirect_cost
Reclamaiton_cost

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4.1.1.4. Physical Model
Connolly and Begg (2002) stated that physical model is database
visualization physically. The model allows designer to make decisions on how the
database is to be implemented. Physical design in tailored a specific DBMS.
There is feedback between physical and logical design, because decision taken
during physical design for improving performance may influence logically.
Physical model of Rehabilitation Bond System followed on Table 4.2. The
existence of physical data will be translated into database software where herewith
using Microsoft Access. Therefore the typical of data also follows with constrains
of data type in Access format.
Table 4.2 Rehabilitation Bond physical design
No Table Column Type Width
1 Administrator Admin_id, Text 10
Admin_name Text 15
Admin_Field Text 20
Password Text 10
2 Applicant Applican_id Text 10
Applican_name Text 15
Applican_Field Text 20
Password Text 10
3 Guest Guest_id Text 10
Guest_name Text 15
Guest_Field Text 20
Password Text 10
4 Company_Profile Company_id Text 10
Company_name Text 15
Mining_type Text 20
Address Text 30
State Text 15
5 Material_Handling_Cost Company_id Text 10
Year Number 5
Earthmoving_act Text 30
Equip_name Text 15
Equip_type Text 20
Fixed_cost Number 15
Labour_cost Number 15
Total_OH Number 5
Total_cost Number 15
6 Material_Handling_Summary Company_id Text 10
Year Number 5
Activity Text 30
Volume Number 10
Origin Text 20
Destination Text 20
Distance Number 10
Grade Number 5
Equipment Text 15

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 No Table Column Type Width
7 Equipment_Price Equip_id Text 10
Equip_type Text 20
Capacity Number 10
Price_per_month Number 15
Price_per_hour Number 15
8 Facility_Removal_Cost Company_id Text 10
Year Number 5
Item Text 20
Material_type Text 20
Volume Number 15
Cost Number 15
Demolition_cost Number 15
9 Revegetation_Cost Company_id Text 10
Year Number 5
Component Text 20
Sub_component Text 20
Unit Number 5
Needs Text 15
Unit_cost Number 15
Revegetated_area Number 10
Cost Number 15
10 Other_Reclamation_Cost Company_id Text 10
Year Number 5
Item Text 20
Cost Number 15
11 Indirect_Cost Company_id Text 10
Year Number 5
Item Text 20
Mobilization Text 20
Volume Number 15
11 Total_Cost Company_id Text 10
Year Number 5
Total_direct_cost Number 15
Total_indirect_cost Number 15
Reclamaiton_cost Number 15

4.1.2. User Interface Design

User interface design of the rehabilitation bond system application requires
programming software which is Microsoft Visual Basic 6.0. According to
Flemming (1998) in Mulyarto (2003), there are seven basic principles in
designing user interface includes; user in control, consistency, forgiveness,
feedback, aesthetics, and simplicity.
ƒ User in Control, an important principle of user interface design is
that the user should always feel in control of the software rather than
feeling controlled by the software.

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 ƒ Consistency, consistency allows user to transfer existing knowledge to
new tasks, learn new things more quickly, and focus more attention on
tasks. This is because they do not have to spend time to trying to
remember the differences in interaction. By providing a sense of
stability, consistency makes the interface familiar and predictable.
ƒ Forgiveness, users like to explore an interface and often learn by trial
and error. An effective interface allows for interactive discovery. It
provides only sets of choices and warns users about potential situations
where they could damage the system or data, or better, makes actions
reversible or recoverable.
ƒ Aesthetics, visual design is important part of an applications interface.
Visual attributes provide valuable impressions and communicate
important cues to the interactive behavior of particular objects. At the
same time, it is important to remember that every visual element that
appears on the screen potentially competes for the user’s attention.
ƒ Simplicity, an interface should be simple (not simplistic), easy to
learn, and easy to use. It most also provide access to all functionality
of an application. Maximizing functionality and maintaining simplicity
work against each other in the interface.

4.2. System Implementation

4.2.1. DSS Tool Application
DSS Tool Application of Rehabilitation Bond System consists of two
major applications, which are database implementation as the engine of mining
rehabilitation database and Information System application as DSS Tools analysis.
The result of system implementation will be described through step of system
development and depend on the user need.
Briefly, front-end visualization of this system is ‘user login’ form, which
can distinguish specific users who has accessibility for storing and maintaining
data as shown on Figure 4.4. Rehabilitation Bond application has two main users
which are administrator who has full accessibility and applicant who can only
store data and each of user is equipped with personal password for security
reason.

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 Figure 4.4 Rehabilitation Bond ‘user login’ application

Figure 4.5 Rehabilitation Bond ‘main form’ application

‘Main form’ of the application (Figure 4.5) consists of several buttons for
non-spatial data processing and map layer orientation for spatial data occurrence.
Map layer orientation in ‘flash on’ automatically loads several spatial data or
thematic map, which are administrative (province and sub district) map, mine

44
company site map, road map, and river map with geographic navigation toolbar.
‘Main form’ also has several buttons to perform mine reclamation activity data
such as calculate reclamation cost button, total reclamation cost recapitulation
button, reclamation bond comparison button, reclamation cost recapitulation
button, financial compulsory button, material handling recapitulation button,
equipment cost module button, and labor cost module button.
As shown in Figure 4.6, reclamation data of mined area will be inputted
by using ‘calculate reclamation cost’ form which consists of as mine facilities
removal cost data, material handling cost data, other direct reclamation cost data,
revegetation cost data, indirect cost data, and input actual reclamation cost data.
.

Calculate Reclamation Cost

Form tampilan

Figure 4.6 Rehabilitation Bond ‘main form’ application

‘Mine facilities removal cost’ form is used to input structure demolition
data, which consist of several information such item (such as: office, warehouse,
workshop, fuel tank, primary processing, secondary processing, stacker, loading
facility, foundations, belt conveyor, railway, bridge, electricity transmission, pole,
fence, and none), material type (such as: bricks, concrete, metal, iron pipe, belt
conveyor, wood, wires, and shaped concrete), cost and volume as shown on
Figure 4.7.

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 Figure 4.7 Mine facilities removal cost form

Figure 4.8 Material Handling Plan form

Figure 4.8 maps material handling item of reclamation data such as
earthmoving activity (consist of: back filling, surface ordering, final ordering,
spreading, and other activity), volume, source and destination of location, haul
distance of the equipment, grade of slope level, and type of equipment (consist of:
back hoe loader, bulldozer, dump truck, hyd breaker, hyd excavator, motor grade,
track loader, and wheel loader). An additional activity of equipment with specific
activity also can be inputted using ‘additional activity’ form represented by add
activity button (Figure 4.9). It comprises productivity and operational hour
calculation item and productivity calculation items such as cycle time and net
bucket capacity. The estimation of haul distance and grade are determined

46
manually, which means that the track of equipment draw and calculated by
reclamation map.

Figure 4.9 Additional Equipment Activity form

Revegetation activity data of mined area can be stored in ‘revegetation

cost’ form (Figure 4.10) that consist of component (such as: seeding, planting,
maintaining and monitoring), sub component (such as: main vegetation seed,
seeding placed making, polybag provisioning, lime, medicines, labor, fertilizer,
soil analysis), specify data, unit, needs, cost and revegetated area wide.

Figure 4.10 Revegetation Cost form

Indirect cost form as shown in Figure 4.11 is a form used to enter direct
cost data such as equipment mobilization and demobilization, reclamation

47
planning cost percentage, administration cost and contractor profit percentage,
administration cost and contractor profit percentage, and management cost
percentage. The range of equipment mobilization and demobilization is fixed
around 2.5% to 10% based on the government regulation.

Figure 4.11 Indirect Cost form

All of reclamation input data form based on mine company report

submitted for each period in a year in order to fulfill government regulation for
reclamation cost per year. Meanwhile, reclamation bond planning for every 5
(five) year is also entered into this system throughout ‘actual reclamation cost’
form. The total amount of reclamation cost can be seen in ‘reclamation cost
recapitulation’ form represented by reclamation cost recapitulation button in main
form.

Figure 4.12 maps the annual total reclamation cost which consists of total
direct cost per year, total indirect cost per year, and total reclamation cost for 5
(five) years. Specific form to perform annual reclamation cost available in
‘reclamation cost recapitulation’ button on main form. The list of material
handling for each year’s mine activities captured on ‘material handling

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recapitulation’ form followed as Figure 4.13. Material handling describes several
reclamation activity such digging and back filling using heavy equipment.

Figure 4.12 Total Reclamation Cost form

Figure 4.13 Material Handling Recapitulation form

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 The DSS Tool analysis of this application placed on ‘reclamation bond
comparison’ form due to compare the amount of reclamation bond which
calculated automatically by the application and the amount of reclamation bond
from mining company report. The signal of comparison appears when these
values meet the variance of particular constrain given before (Figure 4.14).
Specific user such administrator is allowed to change the remark of comparison
category for achieving mark of mine reclamation performance.

Figure 4.14 Reclamation Bond Calculation form

‘Financial compulsory’ form consists of a description of mine reclamation

items such as surety bond, security deposit, minimum expenditure, fixed levy,
government part of production result, taxes, regional government tax and
retribution (Figure 4.15).

Figure 4.15 Financial Compulsory form

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 Administrator and other user are also allowed to add and edit cost of
equipment and labor by using ‘equipment cost module’ form and ‘labor cost
module’ form. Figure 4.16 shows the cost list of heavy equipment and labor,
which is used to calculate total cost expenditure for material handling and earth
moving activity.

Figure 4.16 Equipment and Labour Cost form

Cost Component form consists of direct reclamation and indirect

reclamation data in detail. It describes all activities concerning direct reclamation
data (Figure 4.17).

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 Figure 4.17 Cost component form

4.2.2. DSS Tool Analysis

Until this research conducted, the implementation of government
regulation of mine reclamation activity runs in under optimal way. It caused of
inconsistency regulation that issued by the central government and local
government, as the amount of reclamation bond is quite less than the environment
cost that should be paid by Mine Company. The case happened in South
Kalimantan where the local government regulate that every mining company
should pay Rp. 50.000.000 per 2 ha of opened area or Rp 2.000 / ton of coal for
reclamation bond. This value is lesser than actual environmental cost impact that
has to be released, which is about two hundred until three hundred million rupiah
per hectare.
By constructing this rehabilitation bond DSS Tool, central government
especially DEMR try to arise a pilot project model of rehabilitation bond for mine
reclamation activities. It will be socialized to local government to be used in order
to give a good implementation of mine government regulation of reclamation
bond fixed amount for Mining Authorization holders (Kuasa Pertambangan / KP),

52
Contract of Work for mineral mining (Kontrak Karya / KK) and Work Agreement
for Coal Mining Enterprises (Perjanjian Karya Pengusahaan Pertambangan
Batubara / PKP2B).
Herewith detail cost of mine facilities activity, following as Table 4.3
several activities determined from PT.NNT’s reclamation report. Facilities
removal cost calculated in year 2001 with several types of building (such as
houses, building, camp, hall, plant) and material used of it (such as bricks, metal).
Table 4.3 List of PT.NNT’s mine facilities removal cost
Material Volume Cost Demolition
Year Item
Type (M3) ($) Cost
2001 International school Bricks 3,888 5 19,440
2001 Crusher structure Bricks 28,692 5 143,460
2001 Overland coarse ore conveyor Bricks 228,320 5 1,141,600
2001 Concentrate pump house Bricks 64 5 320
2001 Acetylenes plant storage Bricks 660 5 3,300
2001 Oxygen plant & storage Bricks 432 5 2,160
2001 Power plant service bld Bricks 9,748 5 48,740
2001 Concentrate storage bld Bricks 30,360 5 151,800
2001 Concentrate dewatering facilities Bricks 12,228 5 61,140
2001 Office Bricks 852 5 4,260
2001 Administration offices Bricks 5,992 5 29,960
2001 House GMH Bricks 440 5 2,200
2001 House B Bricks 12,096 5 60,480
2001 House B1 Bricks 10,656 5 53,280
2001 House D Bricks 13,608 5 68,040
2001 House E3 Bricks 8,880 5 44,400
2001 House O Bricks 2,016 5 10,080
2001 Barracs Metal 49,056 5 245,280
2001 Global House Bricks 4,032 5 20,160
2001 Thiess camp Bricks 39,148 5 195,740
2001 Staff commissary/dining kitchen Bricks 4,664 5 23,320
2001 Staff recreation hall Bricks 4,004 5 20,020
2001 Tennis court Bricks 3,032 5 15,160
2001 Public toilet soccer Bricks 332 5 1,660
2001 Multi purpose sport hall Bricks 3,628 5 18,140
2001 Water installation Bricks 16 5 80,220
2001 Water tank Metal 372 5 1,860
2001 Laundry Bricks 960 5 4,800
2001 Medical clinics Bricks 18,700 5 93,500
2002 None None 0 0 0
2003 None None 0 0 0
2004 None None 0 0 0
2005 None None 0 0 0
Total Cost 2,564,520

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 The analysis of this rehabilitation bond system focuses on reclamation
bond comparison and analysis between actual direct cost components content of
reclamation cost with the planned one. Beside the mine report submission for
reclamation bond planning, this application tries to calculate it with mine
reclamation data report.

The tolerance value for the comparison analysis is based on the percentage
of reclamation bond amount that reported mining company close to the
reclamation bond calculation using the number of escalation factor, which is
represent using percent (default value 10% to 20%). The escalation factor is added
value, which represent financial fluctuation such annual inflation factor.

The category of comparison consists of ‘Good’ mark (represented with

green color), ‘Intermediate’ mark (represented with yellow color) and ‘Bad’ mark
(represented with red color). ‘Good’ mark stated that if the amount of actual
reclamation bond from mining company is ranging between ±10% of calculated
reclamation bond. ‘Intermediate’ mark stated that if the amount of actual
reclamation bond from company is around 10-20% greater or less from calculated
reclamation bond, and ‘Bad’ mark stated that if the amount of actual reclamation
from mining company is greater or less than 20% from calculated reclamation
bond.

Based on data from PT.NNT’s reclamation activities period year 2001 to

2005 data, current actual reclamation bond from year 2001 to 2005 is about + $
30,693,782.00 compared to calculated reclamation bond of the application is
about $ 35,776,292.60 with variance around $ 5,082,510.6. According to the bond
category constrain, this value is categorized as ‘Intermediate’. This indicate that
the amount of total reclamation bond for 5 years period 2001 to 2005 still need to
be corrected by the company throughout presentation or inviting them to give
details explanation of the way they achieved that value.

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 Figure 4.18. Equipment and Labour Cost form

The government will store mining company reclamation bond and the
stored bond included its annual bank interest will be accumulated into reclamation
bond. If the company is default or not performing land reclamation as ruled by the
government and company annual reclamation, the government will offer the
reclamation work to third party through work tender. The tolerance in awarding
company into ‘Good’, ‘Intermediate’ or ‘Bad’ is based on valid bank interest
(about 10%). If the award is ‘Good’ then the company does not need to add their
money, as the bank interests of reclamation bond will cover it. If the award is
Intermediate, then mining company will add the remnant of that 10% and if the
award is bad then the reclamation bond will be offered to third party.
The variance value that shown on Figure 4.18 can be clearly explained if
the reclamation bond separated into components of direct cost and indirect cost.
Here with following the breakdown of PT.NNT’s reclamation bonds (Table 4.4)
and calculated reclamation bond (Table 4.5) shows that the amount direct cost
and indirect cost with the percentage in period 2001 to 2005.

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 Table 4.4 List of PT.NNT’s Reclamation Bond
2001 2002 2003 2004 2005
No. DESCRIPTION
$ % $ % $ % $ % $ %
A Direct Cost
A.1 Mine Facilities Remov. 0 0 0 0 0
A.2 Manag. of Land Use 191,852 1,744,676 849,764 2,318,768 6,131,611
A.3 Revegetation 55,104 257,473 129,858 250,375 643,838
A.4 Prevent. & Control. 1,928,115 2,159,467 2,976,022 3,133,454 3,281,065
Sub Total A 2,175,071 4,161,616 3,955,644 5,702,597 10,056,514
B Indirect Cost
B.1 Equipment Mobil 20,000 0.92 21,000 0.50 22,050 0.56 23,153 0.41 24,310 0.24
B.2 Reclamation Plan 205,037 9.43 215,289 5.17 226,053 5.71 237,356 4.16 249,223 2.48
B.3 Contractor's Profits 455,637 20.95 478,419 11.50 502,340 12.70 527,457 9.25 553,830 5.51
B.4 Supervision Cost 159,473 7.33 167,447 4.02 175,819 4.44 184,610 3.24 193,840 1.93
Sub Total B 840,147 38.63 882,155 21.20 926,262 23.42 972,576 17.05 1,021,203 10.15
Total A+B 3,015,218 5,043,771 4,881,906 6,675,173 11,077,717
Reclamation Bond 5 Years 30,693,785

Table 4.5 List of Calculated Rehabilitation Bond

2001 2002 2003 2004 2005
No. DESCRIPTION
$ % $ % $ % $ % $ %
A Direct Cost
A.1 Mine Facilities Remov. 2,564,520 0 0 0 0
A.2 Material Handling 256,769 2,143,531 994,314 2,584,006 6,231,400
A.3 Revegetation Cost 52,656 279,033 119,426 216,283 529,687
A.4 Other Direct Rec. Cost 1,928,115 2,159,467 2,976,022 3,133,454 3,281,065
Sub Total A 4,802,060 4,582,031 4,089,763 5,933,743 10,042,153
B Indirect Cost
B.1 Equipment Mobil. 240,187 5.00 240,929 5.26 204,488 5.00 296,687 5.00 502,108 5.00
B.2 Reclamation Plan 222,749 4.64 223,293 4.87 195,368 4.78 264,230 4.45 401,284 4.00
B.3 Contractor's Profits 334,100 6.96 334,939 7.31 293,032 7.17 396,374 6.68 602,027 5.99
B.4 Management Cost 175,240 3.65 175,685 3.83 152,753 3.73 209,639 3.53 326,169 3.25
Sub Total B 972,277 20.25 974,847 21.28 845,640 20.68 1,166,930 19.67 1,831,588 18.24
Total A+B 5,774,337 5,556,877 4,935,403 7,100,673 11,873,741
Reclamation Bond 5 Years 35,241,031

The comparison of the amount of reclamation bond conducted annually.

Constant value of reclamation bond is straight form year 2002 to 2005 with small
variance (not more than one million dollar). High variance of annual reclamation
cost in year 2001 shows that calculated reclamation cost is higher around 2.5
million dollar than PT.NNT report. The reason of mine facility mobilization and
demobilization activity is usually happen in the beginning of exploitation phase
and sometime need sub-contractors as partner to finish this activity. The report of
technical mine activity in 2001 was submitted by PT.NNT in the beginning year
2001 has include reclamation activity and cost expenditure, exclude mine facilities
removal caused of their activities started in year 1996 and mining lifetime around
40 years. Therefore mine facilities removal will plan closed to the end of mine

56
closure. This variance also implicates the value of indirect cost especially for
equipment administration cost.
The amount of indirect cost was based on total amount of direct cost. The
percentage of indirect cost determined as normally rules that fixed in particular
range by DEMR. For instance, the percentage of mobilization and demobilization
of heavy equipment cost around 2.5 % to 10 % from total direct cost. Reclamation
planning cost was determined around 2 % to10 %. Administration and
contractor’s profit cost was determined around 3 % to 14 % and management fee
was determined around 2 % to 7 %.
This fixed range of indirect cost percentages used to determine the amount
of indirect cost in Reclamation Bond Application. Comparing with PT.NNT’s
reclamation report activities, the percentage of equipment mobilization placed in
small value and closed to average about 0.53 % per year, later the percentage of
contractor’s profit exceeds from government regulation with highest value around
20.95 % in year 2001.Therefore the possibility reason of these phenomena that
happen in year 2001 caused of outsourcing supporting project of reclamation
activity where implicate to the lower percentage of equipment mobilization and
highest percentage of contractor’s profit. The evidence also can be looked up with
the highest percentage of reclamation planning cost about 9.43 % and supervision
cost about 7.33 % in year 2001.
Meanwhile, the comparison in year 2002 later illustrates indifference
calculation of reclamation bond. It was figured by the rate of total reclamation per
year starting from 2002 up to 2005 with variance value not more than one million
dollar such as $ 513,106 in year 2002, $ 53,497 in year 2003, $ 425,500 in year
2004 and $ 796,024 in year 2005. The highest value of previous variance placed
in year 2005 with caused of the high difference in mobilization equipment rate
and reclamation plan rate.

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