Commercial exploitation: The announcement was met with disbelief by environmental groups worried about endangered wildlife.

Commercial exploitation: Forests in Aceh are being cleared for mining. Photo: Michael Bachelard

A mining company has boasted of an Indonesian government decision to free up 1.2 million hectares of virgin forest in Aceh for commercial exploitation.

The announcement to the Canadian stock exchange late on Tuesday was met with disbelief by environmental groups worried about endangered orang-utans, Sumatran tigers, rhinos and elephants across the heavily forested region.

But Ed Rochette, chief executive of Canadian mining company East Asia Minerals, celebrated the ''good progress and positive news for mineral extraction in the area''.

The company's announcement quotes Anwar, chairman of the Aceh government's spatial planning committee, as saying the Indonesian forestry ministry had accepted ''almost 100 per cent of the province's new spatial plan'' that would ''zone large blocks of previously protected forest for mineral extraction, timber concessions and oil palm plantations''.

''Aceh has the most forest cover of any province in Sumatra, which lost 36 per cent of its forests in the past 20 years,'' the release says. ''The new spatial plan would grant nearly 1 million hectares of land for mining, 416,086 for logging and 256,250 hectares for palm oil.

''The plan would also approve an extensive new network of roads through protected forests.''

Mr Rochette said his company was ''working closely with government officials [in Indonesia] and have company representatives in Aceh to obtain reclassification … from 'protected forest' to 'production forest'.''

The company's Miwah gold concession is in a ''protected forest'' and the company is lobbying for approval for an open-pit mine.

Ian Singleton, of the Sumatran Orang-utan Conservation Program, said the news was ''devastating''. Logging and palm oil concessions would want to operate in increasingly scarce lowland forest ''where the densities of tigers, orang-utans and elephants live'', he said.

''They've been arguing for protected forest to be made into production forest, which is obscene.''

Another environmental expert in Aceh, Graham Usher, warned of ''all sorts of environmental issues for communities downstream''