Government to check all mineral finds

Government to check all mineral finds

JAKARTA (JP): All non-oil and gas mining companies in
Indonesia will have to get government verification of their
mineral finds before they can announce their discoveries, a
senior mining official said yesterday.

Darmoko Slamet, who was installed yesterday as the Ministry of
Mines and Energy's secretary-general, said compulsory
verification would be enacted in a mining regulation to be issued
soon.

Darmoko replaced Umar Said, who lost his job after the
exposure early this month of the world's largest gold hoax at the
East Kalimantan Busang property.

Independent consultant Strathcona Mineral Services Ltd
announced, after a one-month audit of the gold find by Canada's
Bre-X Minerals Ltd, that what Bre-X had claimed was the century's
largest gold find was a fraud.

"We'll require all mining companies to report all their
activities including any finds," Darmoko said.

He said the new regulation would oblige mining companies to
report their activities every three months during their first
year of contract.

Assessment

Assessment of their first year's quarterly reports will
determine the future status of their contract, he said.

Darmoko, who is also president of the state-owned mining
company PT Aneka Tambang, said the new regulation was being
drafted to prevent the recurrence of hoaxes like the Busang gold
fraud.

He said Bre-X took advantage of Indonesia's lax rules when it
announced a huge gold find at Busang on Canada's Calgary and
Toronto Stock Exchanges. Bre-X said the Busang gold deposit held
71 million ounces, which immediately shot up its share price.

The government froze Bre-X's operations in Indonesia soon
after Strathcona's report was made public.

But Darmoko said the government would not suspect all other
mining contractors of being as unscrupulous as Bre-X.

"There are still many good, bonafide foreign mining
companies," he said.

He said foreign mining companies played an important role in
Indonesia's mineral development because local mining firms were
not yet fully capable of, or interested in, tapping the high risk
sector.

Meanwhile, the ministry's director general of mines Adjat
Sudradjat said yesterday that the government's Busang
investigation team -- of police and mining officials -- were
continuing their inquiries, but he declined to give details.

He denied media reports that said Bre-X subsidiaries (Bro-X
and Bresea Resources Ltd) would continue mining in Aceh and North
Sulawesi. "It's not true. We have frozen all Bre-X activities
here, including those of its affiliated companies and
subsidiaries" he said. (bnt)

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