Freeport delays project as tensions row<\/p>\n
JAKARTA (JP): Copper and gold mining company PT Freeport
\nIndonesia and sixteen other mining companies have suspended their
\nexploration activities for security and financial reasons, a top
\nofficial at the Ministry of Mines and Energy Rozik said on
\nFriday.<\/p>\n
Director General of General Mining Rozik B. Soetjipto said
\nFreeport had decided to suspend its exploration activities on its
\nBlock B contract area from May 15 to Aug. 15 on the advice of the
\nprovince's security officials.<\/p>\n
Rozik refused to elaborate on security problems in the area,
\nbut tension has reportedly been on the rise in many parts of the
\nprovince over the past several months due to increased separatist
\nmovement activities.<\/p>\n
Freeport operates a huge copper and gold mine in the Grasberg
\narea in the country's easternmost province.<\/p>\n
Aside from the Grasberg area, Freeport holds two other
\ncontract of works: on the 24,700 acre Block A and the 3.25
\nmillion acre Block B.<\/p>\n
Rozik said Freeport was continuing exploration activities on
\nBlock A.<\/p>\n
He said two other companies in Irian Jaya -- PT Irja Eastern
\nMinerals and Nabire Bakti Mining -- had also decided to suspend
\noperations from May 15 to Aug. 15 for security reasons.<\/p>\n
Another 14 mining companies -- nine gold mining companies and
\nfive coal mining companies-- have suspended their exploration
\nactivities in Kalimantan and Sulawesi for up to one year, due to
\nfinancial difficulties.<\/p>\n
The gold mining companies are PT Barito Intan Mas (Central
\nKalimantan), PT Permata Kalindo (Kalimantan), PT Pasifik Masao
\nMineral (Central Kalimantan), PT Pursuit Mahakam West (East
\nKalimantan), PT Pursuit Mahakam East (East Kalimantan), PT Uncak
\nKapuas Mining (West Kalimantan), PT Samideco Metalindo (Southeast
\nSulawesi), PT Pelsart Tambang Kencana (South Kalimantan) and PT
\nYamana Kalindo One (East Kalimantan).<\/p>\n
Rozik did not mention the names of the five coal companies.<\/p>\n
New investors<\/p>\n
Rozik added that despite the economic and political turmoil,
\ninvestment in the country's mining sector was generally buoyant,
\ndrawing attention to the fact that 97 mining companies continued
\nexploration efforts across the country.<\/p>\n
He said the country's mining companies had pledged a total
\ninvestment of US$1.29 billion this year, $463 million which is to
\nbe spent by mining companies already in production, with the
\nremaining investment to be made by companies still in stages of
\nexploration or construction of mines.<\/p>\n
He said up to April, mining companies had invested a total of
\n$59.2 million.<\/p>\n
Rozik said 16 companies, mostly from Canada, had filed
\napplications for eighth generation contract of works (COW), which
\nare still being drafted.<\/p>\n
"Some of the 16 applicants are major mining companies," he
\nsaid.<\/p>\n
Different from previous generation COWs, the draft eighth
\ngeneration COWs will emphasize the investors' obligation to
\nprotect the environment and promote community development.<\/p>\n
The Indonesian Mining Association recently dismissed the draft
\neighth generation COWs as "too detailed" on investors' community
\ndevelopment and environmental protection obligations. The
\norganization said the COW could discourage new investors.<\/p>\n
Rozik said as opposed to previous COWS, the eighth generation
\nCOWs would also specify the levies and retributions that
\ninvestors have to pay local authorities.<\/p>\n
He said the ministry had asked for input from a range of
\nparties, including regional authorities and mining communities,
\nfor the drafting of the eighth generation COWs. He said he
\nexpected the government to approve the draft contract later this
\nyear. (jsk)<\/p>",
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"sponsor": "Okusi Associates",
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