Billiton Indonesia eyes abandoned mining projects

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)