Kuntoro says no comment on lost powers<\/p>\n
JAKARTA (JP): Director General of Mines Kuntoro Mangkusubroto
\nrefused to comment yesterday on reports that he had been stripped
\nof his authority regarding the final mining contracts of work
\nover a gold mining row between Bre-X Minerals of Canada and its
\ntwo Indonesian partners.<\/p>\n
\"Bapak (Mr.) Kuntoro will not make any statement on that to
\nthe press for at least the next few weeks,\" one of his staff told
\nThe Jakarta Post yesterday.<\/p>\n
Kuntoro is the senior official authorized to grant mining
\ncompanies their final contracts of works (COWs) which allow them
\nto start production.<\/p>\n
But the government reportedly took over this authority and
\nvested it directly with Minister of Mines and Energy I.B. Sudjana
\na few weeks ago.<\/p>\n
The Business Times of Singapore quoted informed sources as
\nlinking the measure to Kuntoro's decision to delay issuing a COW
\nto Bre-X, pending the resolution of the Canadian firm's dispute
\nwith PT Krueng Gasui -- one of its two local partners.<\/p>\n
The other partner is PT Sungai Atan Perdana (Askatindo).<\/p>\n
Bre-X set up a strategic alliance late last month with PT
\nPanutan -- owned by Sigit Hardjojudanto, the eldest son of
\nPresident Soeharto -- allowing it to receive a 10 percent carried
\ninterest in two sections of its Busang gold mine and a monthly
\nconsultants fee of US$1 million for 40 months.<\/p>\n
The Canadian company also expects PT Panutan to buy out the
\nold Indonesian shareholders in a bid to pave the way for Bre-X to
\nreceive the final COW from Director General Kuntoro.<\/p>\n
But PT Krueng, which wants a 20 percent carried interest in
\ntwo sections of the Busang gold mine -- Busang I and II -- has
\nrefused to sell its stake in the operation and threatened to take
\nthe issue to court.<\/p>\n
As a result, Kuntoro delayed issuing the contract to Bre-X.
\n\"We cannot process the applications from Bre-X because of its
\ndispute with the Indonesian partner,\" he said recently.<\/p>\n
Minister of Mines and Energy I.B. Sudjana and the ministry's
\nSecretary General Umar Said also refused to comment on the issue
\nyesterday.<\/p>\n
\"Bapak Menteri (Sudjana) and Bapak Sekjen (Umar) are very busy
\nright now. They told me that they cannot give any statement
\nconcerning the mining issue,\" a public relations official from
\nthe ministry told the Post.<\/p>\n
The Singapore business daily reported Thursday that another
\ntheory linked to the issue was that the Bre-X project had
\ngenerated tremendous interest worldwide and major international
\nfirms had expressed an interest in participating in the venture.<\/p>\n
Sources said that Kuntoro had also met in the last few weeks
\nwith several Indonesian businesses who wanted a stake in the mine
\nand this had fueled suspicion that the ministry would further
\ndelay issuing the final COW to Bre-X.<\/p>\n
The controversy over the Busang gold mine and the stripping of
\nKuntoro's decision-making authority is worrying because it might
\nforce the government to delay granting 69 other COWs to private
\ncompanies to explore and develop mineral deposits, mostly in
\nKalimantan.<\/p>\n
Kuntoro said last month he would grant final approval
\nto 70 applications from foreign companies and joint ventures for
\nCOWs.<\/p>\n
He said the applicants for COWs included Bre-X, whose massive
\nBusang deposit in Kalimantan is believed to be the single largest
\ndeposit in the world with an estimated 46 million ounces of gold
\nreserves.<\/p>\n
According to Kuntoro, there are about 300 COW applications in
\nthe pipeline, both for mineral and coal exploration. (bnt)<\/p>",
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"sponsor": "Okusi Associates",
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