Govt awards 50 mining contracts

Govt awards 50 mining contracts

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
awarded yesterday 50 Contracts of Work (COWs) to local and
foreign investors to develop mineral and coal resources across
the country.

The COWs are composed of 38 Seventh Generation COWs to develop
mineral resources and 12 Third Generation COWs for coal mining.

Most of the COW recipients are foreign investors which will
develop mining projects either through their wholly owned
companies or through joint ventures with local companies.

The companies, mostly from Canada, Australia, the United
States, Panama, Singapore, South Korea and Malaysia, will
generally hunt for mineral resources such as gold, silver and
diamonds in Sumatra, Kalimantan, Sulawesi, Maluku and Irian Jaya.

Sudjana said the high number of contracts indicated the
country was still attractive to mining investors despite the
monetary crisis which has been besetting Indonesia since last
July.

"Investment in the mining sector has not been affected by the
current monetary crisis," Sudjana said.

The 50 COWs are part of 72 COWs approved by President Soeharto
and the House of Representatives recently, Sudjana said, adding
that the signing of the other 34 COWs were delayed as his office
needed more time to assess the applications.

There were initially 164 applications for Seventh Generation
COWs, but many of the applicants withdrew for various reasons,
including lack of funds.

"We carefully select the applicants because we don't want
situations like the Busang case happening again," Sudjana said in
a reference to a scandal last year involving Canadian exploration
company Bre-X Minerals Ltd. in the Busang area of East
Kalimantan.

Bre-X said it had discovered a huge gold reserve in its Busang
mine but it was later found to be a hoax.

Sudjana said the 34 foreign investors still being reviewed
mostly have yet to establish their own companies in Indonesia as
required by the 1967 law on foreign investment.

Sudjana called on the investors to quickly fulfill the legal
requirement.

Director General of Mining Adjat Sudradjat said the 50 COW
recipients included four local coal companies, seven foreign
mineral resource companies, eight foreign coal companies and 31
joint ventures for mineral resource development.

Publicly listed Aneka Tambang is involved in 15 of the joint
ventures.

Canadian companies are the most numerous COW recipients with
11 COWs, followed by Singaporean investors with nine, Australian
investors with eight, Panamanian investors with four, and two a
piece for U.S., South Korean and Malaysian investors.

The Canadian ambassador to Indonesia, Gary J. Smith, welcomed
the signing of the COWs, saying the large number of COWs received
by Canadian investors demonstrated a strong interest by Canadian
mining companies to do business in Indonesia.

"The large portion being approved with Canadian companies also
indicates Canada's leading role globally in this sector ... Of
the 38 mining Contracts of Work signed today, 15 directly involve
Canadian mining and exploration interests," Smith said in a
statement sent to The Jakarta Post. (jsk)