Askatindo stops deals with Bre-X

JAKARTA (JP): Indonesian PT Askatindo Karya Mineral, the holder of a mining license for the controversial East Kalimantan Busang area, says it will terminate its contracts with Canada's Bre-X Minerals Ltd on July 4.

Askatindo director Achmad Yani said yesterday that the company had written to notify Bre-X chairman David Walsh that contracts between their companies related to the Busang property would be terminated on July 4.

Askatindo, Bre-X and U.S. Freeport McMoRan Gold and Copper formed a consortium early this year to develop the Busang area which was touted by Bre-X as the richest gold find of the century with deposits amounting 71 million ounces of gold.

But, independent consultant Stratchona Mineral Services Ltd said in its initial assessment that the gold find was a hoax.

It found evidence of tampering with Bre-X's core samples from the Busang site on a scale without precedent in mining history.

Achmad said Askatindo decided to terminate the contracts because Bre-X had not met its responsibilities as the Busang mine operator.

He said Bre-X had withdrawn all its personnel from Indonesia and ceased its operations here in the wake of reports that its personnel were allegedly involved in salting core samples at the Busang site.

Askatindo would also terminate, on July 27, its contract with Bre-X to develop a gold mine in Aceh, Achmad said.

Askatindo's affiliates, PT Amsya Lina and PT Sungai Belayan Sejati, which had agreed with Bre-X to develop gold mines in Kutai, East Kalimantan and Sangir Talaud, North Sulawesi respectively, would also terminate all contracts with Bre-X on July 27, Achmad said.

Askatindo and its affiliates have invited Bre-X for a meeting in Jakarta to discuss the termination of contracts and the rights of Askatindo and its affiliates to indemnification from Bre-X.

Askatindo and its affiliates would pursue legal action under Indonesian and Canadian law if Bre-X failed to attend, he said.

Askatindo is equally owned by tycoon Mohamad "Bob" Hasan and the Syahkareni family. (jsk)