Barrick's boss maintains faith in RI

Barrick's boss maintains faith in RI

TORONTO (Reuter): The man who watched Indonesia's Busang, the largest gold discovery of the century, slip from his grasp is gracious in defeat.

Peter Munk, chairman and chief executive of Canada's Barrick Gold Corp. said on Tuesday he still has faith in Indonesia and its mining law, despite losing the battle for the Busang gold deposit to Freeport-McMoRan Copper and Gold Inc. last week.

"It's in good hands now and I wish them all the good luck," Munk, 69, told Reuters in a telephone interview from Switzerland.

Munk and a team of executives and high-profile advisers -- including former U.S. President George Bush and former Canadian Prime Minister Brian Mulroney -- spent months wooing the Indonesian government in an effort to win control of Busang.

In a race that included most of the world's biggest mining concerns, Barrick, the world's second largest gold company, initially dominated the negotiations for control of Busang, which was discovered and 90 percent-owned by Calgary, Alberta-based prospector Bre-X Minerals Ltd.

Busang contains at least 71 million ounces of gold, valued at about $25 billion, but Bre-X and others believe the size of the deposit may be much larger.

Late last year the Indonesian government told Bre-X to form a joint venture with Barrick and set a deadline for Feb. 17.

But Munk's glittering inside track to success ended abruptly when the Indonesian government last month brought in Muhammad "Bob" Hasan, an Indonesian timber tycoon with extensive business interests, many friends in the mining community and close ties with President Soeharto.

"Control was not in my hands. It was really not any more in the government's hands," Munk said. "It was transferred to Mr. Hasan's hands. He was appointed to make the final say and make the final decision.

"I did not know of Mr. Hasan's existence until the middle of January when I was informed by the government. He was not involved."

Shunning Barrick, Hasan brokered a deal that gave Freeport 15 percent of Busang and the right to mine the deposit. The arrangement left Bre-X with 45 percent and handed the rest to the Indonesian government and to two Indonesian companies controlled by Hasan.

Bre-X received no compensation in the deal.

Despite being thwarted in the end game, Munk said he harbored no resentment. "So is life," he said philosophically.

"It's given me a great amount of encouragement. Busang is not the largest gold find in Indonesia," he predicted. "I think there will be many more gold finds and we intend to find many of them."

The Bre-X case was an exception, Munk said, adding that he still had faith that Indonesian mining laws would serve him well in the future.

"Bre-X was a very unfortunate example and I think it is in no way an indication of the stability of the mining industry and the interests of the international mining community in Indonesia," he said. "We intend to pursue our program in Indonesia with a great amount of vigor."

But Barrick's plans do not include any fresh attempt to bid for Busang, despite the riches contained in the deposit.

Munk said he was "absolutely not interested" in a project that Barrick could not control.

"We've (grown) without Busang and we will continue to do it without Busang," he said. "But we will not sacrifice the fundamental principles on which we built our company. That ends and begins with controlling our own mine."