Bre-X and Barrick face new hurdle
JAKARTA (JP): Canadian mining companies Bre-X Minerals Ltd. and Barrick Gold Corp. face a new stumbling block before they can develop the disputed Busang gold mine.
Sources said yesterday Bre-X did not agree that the government's 10 percent stake in the project could be taken equally from the two firms' shares, and that the government was planning to revoke the Busang II concession.
"Barrick wants to see that the government's request for a 10 percent stake in Busang would be taken equally from the two companies' shares. But seemingly Bre-X has objected to such a scheme," an informed source told The Jakarta Post yesterday.
She said Barrick was waiting for "new solutions" to several disagreements between the two Canadian companies.
Another informed mining industry source said the government had planned to revoke the Busang II mining concession, which was being held by PT Asketindo, Bre-X's local partner.
Busang II, which Bre-X claims holds one of the world's largest deposits with an estimated 57.33 million ounces of gold, was discovered by PT Asketindo and Bre-X.
The source said that after the discovery the government granted Bre-X and Asketindo a temporary mining contract, which would qualify them for a final contract of work to develop the gold mine.
He said the revocation of the Busang II concession would mean that Asketindo and Bre-X -- which in October signed up Sigit Hardjojudanto, Rukmana's eldest brother -- would no longer have the right to develop the gold mine and pave the way for other firms to control it.
Umar Said, the Ministry of Mines and Energy's secretary- general, said earlier that the two Canadian companies had finally agreed that Barrick would have a 75 percent stake and Bre-X a 25 percent in the gold mine.
He said the two mining firms had also agreed to accommodate a 10 percent stake for the government but were undecided on how to arrange it.
Another Canadian mining company, Placer Dome Inc., said it was still keen to acquire a substantial interest in the Busang mine. (bnt)