BHP puts RI investment on hold due to mining issues

BHP puts RI investment on hold due to mining issues

MELBOURNE (Dow Jones): Australia's Broken Hill Proprietary Co.
Ltd. (BHP), a minerals, energy and steel company, is putting on
hold any new major investment in Indonesia, preferring to wait
out an end to uncertainty over mining issues in the archipelago.

"We are taking a bit of a wait and see (approach) before we
jump in with a lot more investment there," BHP Chief Executive
Paul Anderson told analysts and media at a presentation on the
company's 1999-00 profit result.

"I think like all major players right now we have put our
plans on hold to see how events unfold there," he said,

He said there were "a lot of problems" in Indonesia with
regard to illegal mining as well as the enforcement of operating
agreements, both regionally and federally.

In addition to coal operations, BHP is exploring the
feasibility of developing a nickel mine on Indonesia's Gag
Island. BHP's potential partner in the project, Canada's
Falconbridge Ltd., is undertaking to fund the feasibility study,
planning to spend US$75 million over the next two years.

The partners in the project are currently trying to clarify
with Indonesian authorities the classification of forestry on Gag
Island.

Since 1990, when BHP and its other partner in the project,
Indonesia State mining company PT Aneka Tambang, were first
granted a so-called Contract of Work for Gag Island, the
classification of forestry on the island has changed to prevent
the open pit mining that would be needed to develop the deposit.
BHP and is now working with various Indonesian authorities to
have that changed.