Minister strips aide's power to issue mining contracts<\/p>\n
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
\nconfirmed yesterday he had stripped the director general of
\nmines, Kuntoro Mangkusubroto, of his authority to issue final
\ncontracts of work to mining contractors.<\/p>\n
But Sudjana, facing a barrage of reporter's questions, denied
\nthe measure had anything to do with Kuntoro's indecisiveness over
\nissuing a contract of work to Bre-X Minerals of Canada pending
\nthe resolution of its dispute with its local partners.<\/p>\n
"It was simply an internal matter of my ministry and it was
\nwithin my authority to revoke the licensing power of the director
\ngeneral. Outsiders are not entitled to know the reasons," Sudjana
\nsaid.<\/p>\n
Reporters asked Sudjana many questions yesterday at a ceremony
\nfor the signing of power supply contracts between the State
\nElectricity Company and private power generators, but none of the
\nquestions touched upon the power deals.<\/p>\n
All the questions focused on Sudjana's controversial decision
\nto revoke Kuntoro's licensing authority. Kuntoro is well
\nrespected in the business community.<\/p>\n
Kuntoro, who was at the ceremony, refused to answer any
\nquestions, saying it was now the minister's matter.<\/p>\n
Bre-X Minerals, which claims to have made the world's largest
\ngold discovery in Busang, East Kalimantan, with estimated
\nreserves of 30 million ounces, made a strategic alliance late
\nlast month with Sigit Hardjojudanto, President Soeharto's eldest
\nson.<\/p>\n
Bre-X granted Sigit's PT Panutan Duta a 10 percent carried
\ninterest in two sections of the gold mine -- Busang I and Busang
\nII -- and a consultants fee of US$1 million a month for 40
\nmonths.<\/p>\n
Bre-X announced last month it planned to lend PT Panutan money
\nto buy out its two Indonesian partners -- PT Krueng Gasui and PT
\nSungai Atan Perdana.<\/p>\n
But PT Krueng Gasui president Jusuf Merukh said early this
\nmonth that his company's and PT Sungai Atan's shares in the
\nBusang gold project were not for sale.<\/p>\n
Analysts see Bre-X's strategic alliance with PT Panutan as a
\nshort-cut to resolving its dispute with its Indonesian partners
\nwhich has delayed its final contract of work for the Busang gold
\nproject.<\/p>\n
Nonetheless, Kuntoro, who until the middle of last month had
\nthe final authority on mining contracts of work, put Bre-X's
\ncontract on hold pending the resolution of its dispute.<\/p>\n
Sudjana issued decree No. 1409, dated Oct.17, 1996, to revoke
\nthree previous minister of mines and energy rulings issued in
\n1985 and 1986 which vested contract-of-work licensing with the
\ndirector general of mines.<\/p>\n
The latest decree transfers the licensing authority on mining
\ncontracts directly to the minister of mines and energy,
\nrestricting the director general of mines' responsibility to
\nmainly administrative work.<\/p>\n
Sudjana said Bre-X's contract-of-work application was still
\nbeing assessed.<\/p>\n
"Its application was only recently filed and it is still being
\nassessed. We cannot process it as quickly as frying a banana," he
\nretorted.<\/p>\n
Early this year Kuntoro's office launched what businessmen
\nhail is an efficient information system for mining zoning.<\/p>\n
The information system, developed for Rp 8 billion ($3.4
\nmillion), is designed to make investing in the country's mineral
\nindustry easier. (bnt\/vin)<\/p>",
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