Govt rapped over Busang gold mine

JAKARTA (JP): House members criticized yesterday the way the government handled the huge East Kalimantan Busang gold mine and urged the government to tackle the problem as soon as possible.

"What's wrong in the government's move is that it applies a power approach rather than international business principles in its efforts to get a share in the gold mine," Iskandar Mandji, a member of Commission VI, said in a hearing with Minister of Mines and Energy I.B. Sudjana and his staff.

Commission VI deals with industry, mining, manpower and investment.

Iskandar said the government should ask for a share in a transparent manner in accordance with international business principles. "There is nothing wrong with such a request. It is just normal as long as it is made transparently and in line with international business principles."

He regretted the ministry's Secretary General Umar Said who, on the minister's behalf, sent a letter to Busang mine investors Bre-X Minerals and Barrick stipulating the government's request that the two Canadian companies give the government 10 percent of the mine. Of the remaining 90 percent, 75 percent would go to Barrick and 25 percent to Bre-X.

"Why don't we handle it more wisely. For example we ask them to tie up with our state-owned companies such as PT Tambang Timah," he said.

He said if Bre-X and Barrick could not reach an agreement on developing the gold mine soon the Commission would revoke its recommendation Bre-X's temporary license.

"If necessary we can arrange an international tender to select investors to develop the gold mine," he said.

Sunaryo Haddade of the Golkar faction agreed and said the problem should be solved before May's general election.

He said the government's handling of the issue had tarnished Indonesia's image among foreign investors and could discourage other foreign investors.

Bachtiar Chamsyah of the United Development Faction said the ministry should be consistent with its decision. "Any inconsistency will damage our credibility abroad".

Minister of Mines and Energy I.B. Sudjana promised the government would solve the problem soon.

"The two companies have reached an agreement on developing the Busang gold mine. But there are several things they have yet to settle," Sudjana said, "I think they will be ready to set up a joint venture to develop the gold mine in February." (bnt)