Billiton Indonesia eyes abandoned mining projects

JAKARTA (JP): PT Billiton Indonesia, a subsidiary of the Netherlands' giant mining company Billiton, is eying abandoned mining projects throughout the country.

Company director Gerry Mbatemooy said yesterday that Billiton had approached several cash-strapped mining contractors to talk of possible takeovers of their projects.

Most of the projects are part the sixth and seventh generation contracts of work (COWs), he explained, adding that no deals had been made.

"Billiton wants to strengthen its presence in the country's promising mining sector."

The government awarded 65 sixth generation COWs last year and 35 seventh generation COWs last month to foreign mining companies to explore and tap the country's hard mineral resources, including gold, silver, tin, nickel, copper and diamonds.

Gerry said most of the COW holders had ceased exploration of their contract areas due to financial difficulties.

The companies, mostly from Canada and Australia, have found it difficult to raise funds from stock markets due to a slump in the prices of hard mineral products, he said.

Gerry said Billiton was especially interested in buying contract areas containing base metals, such as tin, zinc, copper and nickel.

Billiton, listed in the London Stock Exchange, started operations in Indonesia early this century with tin mining on Belitung island.

Several giant mining companies have taken turns buying shares of the company throughout the decades. Gold mining company Gencor of South Africa is the latest majority holder, having bought the company from Shell in 1994.

Gencor has made Billiton its base metal division, while subsidiary Goldfield is its gold division and Ingwe its coal division.

Ingwe, one of the world's largest coal miners, recently marked its entry into Indonesia by establishing joint ventures with three local coal mining companies.

Gerry said Billiton, through its subsidiary Prima Lirang Mining, extracted two tons of gold per year at its contract area on Wetar island, southeast Maluku, during the period between 1991 and 1995.

"We have mined all of the gold reserves and left the contract area two years ago," Gerry said, adding the company had successfully reforested the former mining area.

He said Billiton currently held two COWs to look for copper and gold on Romang island in southeast Maluku and in Lang Ngawa, East Kalimantan. (jsk)