Size of stake not key factor in Busang mining<\/p>\n
By Benget Simbolon Tnb.<\/p>\n
ELKO, Nevada (JP): The size of the government's stake in the
\nBusang gold mine would not guarantee that the mine will give the
\nbest benefits to the people, said a Barrick's executive.<\/p>\n
Vincent Borg, vice president of Barrick Gold Corporation for
\nCommunication, said here over the weekend that the huge Busang
\ndevelopment should be seen from all aspects if the government
\nwanted it to contribute the most benefit to the Indonesian
\npeople.<\/p>\n
\"It doesn't make any sense if a contractor can only offer a
\nbigger stake to you but it has no plan to pursue a community
\ndevelopment program and to deal with the environmental issue,\"
\nBorg told a group of Indonesian journalists invited by his
\ncompany to see its mining activities in Nevada.<\/p>\n
Borg was commenting on calls by a number of Indonesian experts
\nthat the government should only award the contract to exploit the
\nBusang mine to the foreign company which offers Indonesia a
\nbigger stake.<\/p>\n
The Busang gold mine is estimated to contain 57 million ounces
\nof gold, one of the largest gold deposits in the world.<\/p>\n
Recently, Placer Dome, also a Canadian company, offered
\nIndonesia -- government or private firms -- a 40 percent stake in
\nthe Busang gold mine.<\/p>\n
Seemingly, a number of Indonesian analysts saw that Placer
\nDome's offer of 40 percent to Indonesia was better than
\nBarrick's.<\/p>\n
Commenting on the issue, Borg asked, \"Wait, wait, 40 percent
\nof what? Does it mean in real terms? You have to see the whole
\nissue first and not partly,\" adding that the 10 percent stake to
\nthe government would not be Barrick's only offer to Indonesia.<\/p>\n
Barrick is currently engaged in intensive negotiations with
\nBre-X , the founder of the Busang gold deposits, to form a joint
\nventure for the exploitation of the mine. The two offer a 10
\npercent stake to the Indonesian government. Barrick will owns
\n67.5 percent while Bre-X and its Indonesian partners, in the
\njoint venture which will develop the mine, will own the remaining
\n22.5 percent.<\/p>\n
\"But we don't know yet the percentage of our local partners'
\nshare. We're still pursuing negotiations with all of them,
\nincluding the government,\" he told The Jakarta Post.<\/p>\n
Asked whether Barrick will provide more than a 40 percent
\nshare to Indonesia, he said, \"I don't think we can do that. But
\nas I told you, there are aspects of the Busang development
\nproject that should be considered to benefit the Indonesian
\npeople,\" he said, adding that Barrick had presented to the
\ngovernment an integrated proposal that he claimed, as a whole,
\nwas better than the others. He did not elaborate.<\/p>\n
He said that Barrick had the experience in community
\ndevelopment around mining operations and in dealing with
\nenvironmental problems. Such projects cost a lot of money, he
\nsaid.<\/p>\n
Mining analysts in Indonesia had urged the government to award
\nthe Busang contract to a foreign mining company that has
\nexperience in community development and in dealing with
\nenvironmental problem.<\/p>\n
\"Other than that, we have the financial and technological
\ncapability to develop the gold mine,\" Borg said, adding that his
\ncompany had mining projects outside of Canada, including in the
\nU.S., and in South American countries, such as in Chile and Peru.<\/p>\n
Its Goldstrike gold mine in Elko, Nevada, the U.S., is the
\nlargest open-pit mine in the world, producing about two million
\nounces of gold per year.<\/p>\n
The two Canadian firms, Barrick and Bre-X -- which discovered
\nthe huge gold mine in Busang, East Kalimantan -- were given one
\nmonth by the government, until Feb. 15 (not Feb. 17 as reported
\nby local media, because the government's letters to the two firms
\nconcerning the deadline were dated Feb. 15) to reach a final
\nagreement between them to develop the Busang gold mine.<\/p>\n
If they fail, the government will take over the mining project
\nand find other foreign investors. There is a possibility that the
\ngovernment will arrange an open tender to decide the contractor
\nfor the gold mine.<\/p>\n
As the deadline is getting near, the competition between
\nBarrick and Placer Dome to become a partner of Bre-X is also
\ngetting tougher.<\/p>\n
Minister of Mines and Energy I.B. Sudjana said early this
\nmonth that the government would study Placer Dome's proposal. He
\nconfirmed that there is still a chance for the company.<\/p>\n
The statement has led to uncertainty over which company will
\nwin the contract for Busang.<\/p>\n
Asked about the chance of Barrick, Borg said, \"I don't know
\nyet. We're pursuing negotiations with Bre-X. But we'll know it
\nafter the Feb. 15 deadline,\" he told the Post.<\/p>\n
He said it was not true that Barrick only started negotiating
\nwith Bre-X last November. \"In fact we have been pursuing
\nnegotiations with the firm since last July not November,\" he
\nsaid. (bnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/size-of-stake-not-key-factor-in-busang-mining-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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