Canada's Bre-X to settle problems with workers

Canada's Bre-X to settle problems with workers

JAKARTA (JP): Canada's Bre-X Minerals Ltd has assured the
Indonesian government that it will honor its obligations to its
549 dismissed workers, including 15 expatriates, by the end of
the month, Antara reported yesterday.

After three days of negotiation supervised by the Ministry of
Manpower last week, the 549 workers agreed to be dismissed from
May 19, while Bre-X agreed to pay medical, transportation and
housing allowances, their May salaries and severance pay, as
required by government regulations.

The company temporarily maintains 15 employees, including an
expatriate, accounting staff, a driver and office boy, to settle
its liabilities to creditors, the government and workers.

"The severance pay ranges from Rp 2 million to Rp 36 million,
and it adds up to US$740,000," Director General of Industrial
Relations and Labor Standards Suwarto was quoted by Antara as
saying yesterday. He said he was satisfied with the result of the
negotiations.

According to Suwarto, the dismissed workers included 400
workers in Busang, 30 in Aceh, 40 in North Sulawesi, 13 in Irian
Jaya and 23 in Jakarta.

The Indonesian government froze all Bre-X operations and those
of its local subsidiaries on May 6 after the company's claims of
a 200-million ounce gold find at Busang, East Kalimantan, were
found to be false.

Bre-X financial director Bernhard Leod accompanied Suwarto at
the press conference at the ministry yesterday.

According to Leod, the money for the workers was in a bank and
would be paid out before the end of the month.

Leod denied his own statement last week that Bre-X planned to
sell all its assets in Kalimantan, Jakarta, Aceh and North
Sulawesi to meet financial obligations.

"It is not true that we sold our assets to pay the workers,"
he said.

Leod expressed hope that his company would be allowed to
resume operations in Indonesia.

Despite having a credibility problem due to the gold hoax,
Suwarto said he believed Bre-X would fulfill its commitments.

"I don't want to link it with the gold, but I am confident the
company will pay its workers soon," said Suwarto. He did not say
what his office would do if Bre-X reneged. (06)