Minister told to stop mining uproar<\/p>\n
JAKARTA (JP): President Soeharto yesterday ordered Minister of
\nMines and Energy Ida Bagus Sudjana to explain the government's
\nmining policy and end the current debate on Freeport and Busang
\nmining projects.<\/p>\n
Sudjana told journalists after meeting with Soeharto that he
\nwould give the explanation after the next cabinet meeting,
\nscheduled on Feb. 5.<\/p>\n
\"Bapak President (Soeharto) has ordered me to prepare an
\nexplanation on the government's policy, especially that on the
\nmining sector, because many differing opinions have come to the
\nsurface,\" Sudjana said.<\/p>\n
The minister, however, did not specifically refer to the
\ncurrent debate on the government's stake in PT Freeport Indonesia
\nand the disputed Busang gold mine in East Kalimantan.<\/p>\n
But it is widely known that the government is under public
\npressure to increase its stake in the Freeport and Busang
\nprojects.<\/p>\n
Sudjana said the government's explanation would also cover its
\nparticipation in mining ventures so that \"the public knows that
\nthe government's income (from the venture) is not from dividends
\nonly but also from other sources\".<\/p>\n
In addition to dividends, the government collects dead rent
\nand royalty from such ventures. The government also collects
\nvarious taxes, including income tax and value-added tax.<\/p>\n
Sudjana said the government would not increase its stake in
\nthe planned Busang venture due to financial constraints.<\/p>\n
\"It is impossible for the government to allocate all of its
\nfunds to exploit such a high-risk project because the government
\nalso needs to develop other sectors,\" Sudjana argued.<\/p>\n
The Busang gold mine, believed to contain 57 million ounces of
\ngold reserves, is being disputed by Canadian mining companies
\nBarrick Gold Corp. and Bre-X Minerals Ltd., and later Place Dome
\nInc.<\/p>\n
The government has set Feb. 17 as the deadline for
\nnegotiations, including with their local partners.<\/p>\n
If they fail to achieve an agreement by the set date, the
\ngovernment would likely find other investors, Sudjana said.<\/p>\n
The government, however, has decided to only take a 10 percent
\nstake in the planned Busang venture. But it has encouraged local
\nprivate firms to take more shares in the venture to increase the
\nIndonesian stake.<\/p>\n
Several politicians such as Amien Rais and analysts such as
\nRizal Ramli sharply criticized the government recently for only
\nasking for a 10 percent stake in the Canadian joint venture.<\/p>\n
They also demanded that the government review Freeport's work
\ncontract and even suspend negotiations with foreign partners in
\nthe Busang gold project alleging that the current arrangement
\nignores the interest of the people.<\/p>\n
Freeport Indonesia, 81.28 percent owned by U.S.-based Freeport
\nMcMoRan Copper and Gold Inc., operates one of the world's largest
\ncopper and gold mines in Irian Jaya.<\/p>\n
The government only controls 9.36 percent of the venture. The
\nother 9.26 percent stake is held by PT Indocopper Investama
\nCorporation -- an affiliate of the Bakrie Group.<\/p>\n
Sudjana contended that by taking a minority stake it did not
\nmean that the government was in a weaker position.<\/p>\n
\"If some people are of the opinion that we are in a weak
\nposition, let's prove whether it is true or not. Let's wait for
\nthe explanation,\" Sudjana said. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/minister-told-to-stop-mining-uproar-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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