IIIIIIIIIIICOULD..JUST>>SCREAMMMMMMMMMMMMMMM!!!!!!!!!!!!!!!!!!!!!!!!!!
FOCUS-New contracts fillip for Indonesian mining
Reuters Story - February 22, 1998 20:46
%EMRG %MET %ID %MIN %GOL %GDM %MIS %CA %CRIM %US %WEA %AU FCX N.TO ANTM.JK BHPX V%REUTER P%RTR
By Jim Poole
JAKARTA, Feb 23 (Reuters) - The Indonesian government has
announced a fresh round of 38 mining contracts that will allow
foreign firms to develop gold, silver, nickel and diamond
deposits in this sprawling mineral-rich archipelago.
"The event is a strong signal that Indonesia is open to
foreign participation in this important sector," said Canada's
Ambassador to Indonesia Gary Smith.
"Of the 38 contracts, fifteen directly involve Canadian
mining and exploration interests," he said in a statement last
week.
The proposals have been carefully vetted to avoid any repeat
of last year's fiasco involving Canada's Bre-X Minerals which
claimed the gold find of the century in Indonesia, only for it
to turn out to be a costly fraud.
"We carefully select the applicants because we don't want
situations like the Busang case happening again," said Mines and
Energy Minister Ida Bagus Sudjana.
Bre-X said it discovered a huge mine in the Busang area of
Kalimantan but it turned out to be a hoax, wiping out the firm's
market value of Canada $6.0 billion (US$4.2 billion) and sapping
confidence in exploration stocks.
"A huge amount of capital is required for exploration
activities, which are very speculative in terms of results,"
Sudjana told reporters.
The country is suffering its worst economic crisis in
decades, but the plunge in the rupiah and financial turmoil seem
to have had little impact so far on mining investment.
"Investment in the mining sector has not been affected by
the current monetary crisis," Sudjana said.
The mining potential of these volcanic islands is huge. Its
large mineral reserves include bauxite, copper, nickel, gold and
diamonds.
PT Freeport Indonesia, 82 percent-owned by U.S. company
Freeport McMoRan Copper and Gold Inc , has the world's
largest copper and gold mine in Irian Jaya.
PT Inco, 59 percent-owned by Inco Ltd of Canada,
mines nickel in the Soraoko area of Sulawesi, and PT Aneka
Tambang mines the metal in southeast Sulawesi and Gebe
island.
Freeport and a scattering of mines across the islands
produce about 100 tonnes of gold a year.
Dry weather has affected operations at PT Inco, but the
giant Freeport mine uses underground water and is not dependent
on rivers to transport the concentrates.
PT Aneka Tambang was awarded 15 of the latest round of
contracts in joint ventures with foreign companies.
Chief among them was a venture with BHP Asia-Pacific Nickel
Pty Ltd to produce 40,000 tonnes of nickel and 3,600 tonnes of
cobalt starting in 2001 from Gag island deposits off west Irian
Jaya. Australia's Broken Hill Pty Co Ltd has a
75-percent stake in the project, with the balance held by PT
Aneka Tambang.
BHP has 75 percent of the equity and says output will only
go ahead if costs were near the world's lowest.
Among other contracts awarded to PT Aneka Tambang, 12 were
for gold, one for nickel and one for diamonds. It has 10 to 30
percent of these projects with foreign partners holding the
rest.
-- Jakarta newsroom (6221) 384-6364; Fax (6221) 344-8404
-- Email: jakarta.newsroomreuters.com
C |
