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)

Workers -- Page 3