Govt wants bigger local Busang stake

JAKARTA (JP): The government is giving local companies the widest possible opportunity to own big stakes in the huge Busang gold mine in East Kalimantan, Minister of Mines and Energy I.B. Sudjana said yesterday.

"Therefore, the government encourages businesspeople such as Mohammad (Bob) Hasan to join the battle for ownership of the Busang gold project," Sudjana said in North Sumatra.

Sudjana was quoted by Antara as saying in Kisaran that the government wanted to see a bigger national shareholding in the gold project.

"I have sent letters to the two Canadian companies asking them to renegotiate the shareholding structure with their Indonesian partners," he added.

Sudjana was replying to reporters' questions about Bob's entry into the battle for the gold mine through PT Nusantara Ampera Bhakti, a company controlled by three foundations chaired by President Soeharto.

He said the government had asked the two Canadian firms -- Barrick Gold Corp. and Bre-X Minerals Ltd -- to accommodate the aspirations of their local partners as much as possible.

The Busang gold project raised controversy last October after Bre-X teamed up with President Soeharto's eldest son Sigit Harjojudanto and Barrick teamed up with Sigit's sister Mrs. Siti Hardianti Rukmana in a bid to speed up approvals to develop the mine.

"I don't want Indonesia losing out (in the dispute)," Sudjana added.

The government confirmed last month that Bre-X and Barrick had agreed on a 25 percent-75 percent split of the Busang gold venture. They also agreed to provide a 10 percent stake to the Indonesian government.

However, Bre-X has been disputing with its local partners, PT Krueng Gasui, which owns an undisputed 10 percent of the first of the three Busang delineated exploration zones, and PT Askatindo Karya Mineral, which owns a 10 percent interest in each of the other two zones.

In a surprise move, Syakerani of PT Askatindo reportedly sold 50 percent of his shares in the company to timber baron Bob Hasan, a politically-well-connected businessman.

Sudjana confirmed yesterday that the government would let local companies enter the Canadian joint venture to increase Indonesian interests in the Busang mine which reportedly holds more than 57 million ounces of gold.

He stressed that the opportunities were not only open to Bob Hasan but also to other Indonesian businessmen interested in entering the massive Busang gold deposit.

On Tuesday, Placer Dome Inc., another Canadian gold miner, offered to merge with Bre-X, which found the deposit, to expedite the development of the Busang gold reserves.

Placer Dome said its proposal provided for significant Indonesian ownership of the gold mine as well as an opportunity for Bre-X shareholders to gain while continuing their participation in Busang.

Sudjana said that he would study Placer Dome's proposal which promised 40 percent Indonesian ownership.

Sudjana confirmed yesterday the government would not increase its stake in the joint venture because of financial constraints. But it would give an opportunity to local enterprises to take a much bigger stake in the gold venture. (rid/vin)