Freeport position unclear: Sudjana

JAKARTA (JP): The minister of mines and energy, Ida Bagus Sudjana, said yesterday he had not received any reports of U.S. mining giant Freeport-McMoRan Copper and Gold Inc's plan to pull out of the Busang gold project.

"There is not yet any official announcement or an official report to the Ministry of Mines and Energy about Freeport's plan to withdraw," he said after the signing ceremony for the seventh generation of contract of works.

Sudjana said it was up to Freeport if it wanted to withdraw.

Earlier, Harian Ekonomi Neraca reported that Freeport planned to pull out of the East Kalimantan gold project before the results of an independent audit to determine how much gold Busang contained.

The paper quoted an anonymous source as saying Freeport would withdraw to "avoid any possible law suits that may arise".

The company has not confirmed the report.

Canadian firm Bre-X Minerals Ltd owns a 45 percent of Busang, Freeport 15 percent, the Indonesian government 10 percent and Nusamba Group 30 percent.

Busang Indonesian Gold's spokesman, JV Nia Srinisititi, denied Freeport was pulling out.

Bre-X, which discovered the Busang gold deposit, once claimed the field contained 70.8 million ounces which would make it the find of the century.

But in late March, Freeport said gold reserves at Busang were insignificant. This caused investors to panic and dump Bre-X shares.

New Busang samples were taken by Canadian consultants Statchone and tested independently in Australian laboratories.

Freeport's spokesman, Kristin Lemkau, said last week the company had continued analyzing soil samples and still believed Busang did not contain much gold. (jsk)