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The Indonesian Government has revoked the exploration licence of the partner of Arc Exploration following violent protests by locals that have left two people dead.
Locals have been protesting the development of Sumber Mineral Nusantara, Arc Exploration’s local partner, for around two years over its gold mining development.
Thousands of people rioted and burned a government office on Sumbawa island on Thursday, claiming the project would damage the environment and ruin their livelihoods.
Following the protest Government officials told local media the project’s approval had been pulled "for the sake of security".
Officials said they were "ready to face any possible legal lawsuit by mining companies against the revocation".
In a statement to the ASX yesterday Arc Exploration said it was "assessing the situation and reviewing alternatives open to it".
The company said the exploration licence held by its local partner had previously been temporarily suspended until 23 December 2012.
It said "civil disturbances and security issues" had forced the Indonesian Government to revoke the licence completely.
Arc Exploration said it and its joint venture partner had remained in full regulatory compliance at the times the licence had been suspended and later revoked.