Bre-X and Barrick battle for Busang gold
Bre-X and Barrick battle for Busang gold
JAKARTA (JP): The battle to acquire control of the world's
largest gold deposits in West Kalimantan has accelerated, pitting
a Canadian company against an American competitor, each backed by
a politically powerful local partner.
"The Indonesian government may appoint Barrick Gold Corp. of
the United States as the final mining contractor, instead of
Canada's Bre-X Minerals who initially discovered the huge gold
deposits," the Kontan business weekly newspaper said yesterday.
The weekly, quoting informed sources, said Mrs. Siti
Hardiyanti Rukmana (Tutut) -- President Soeharto's eldest
daughter and Barrick's local partner -- met Minister of Mines and
Energy I.B. Sudjana for 90 minutes on Wednesday apparently to
discuss contracts for the Busang gold mines.
"A few hours later officials met successively with three
Canadian executives and two American businessmen at the
headquarters of the ministry of mines and energy," the weekly
said.
"The three Canadians emerged out of the meeting with sour
faces while the Americans came out cheerfully," it said,
indicating that the American company had a better chance to
control the Busang gold mines.
Late last month, when Bre-X signed a cooperation agreement
with Sigit Hardjojudanto -- Tutut's younger brother -- most
analysts immediately predicted that the Canadian mining company
would soon get the final contracts of work for the two gold mines
in Busang.
Under the agreement, Sigit's company, PT Panutan Duta, would
get US$1 million in monthly consulting fees for 40 months and
receive a 10 percent carried interest in the two mines.
Most analysts reckoned that Bre-X's alliance with Sigit aimed
to help Bre-X obtain the final contracts of work for the two gold
mines, claimed to contain 44 million ounces of gold.
Kontan quoted mining officials as predicting that the Barrick-
Tutut consortium would most likely acquire 75 percent of the gold
mining concessions while the Bre-X-Panutan consortium would have
to be content with the remaining 25 percent.
But analysts foresaw international repercussions if the
contracts were awarded to the U.S. company because Bre-X holds a
provisional license for the gold mines.
"Awarding the Busang gold concessions to Barrick may set off a
chain of international protests and law suits because it was the
Canadian firm which initially made the gold discovery under its
provisional license," the analysts were quoted as warning.
The analysts also reckoned that if Bre-X failed to get the
final contracts, Sigit's Panutan might also lose its lucrative
deal with the Canadian company. (vin)