House finally approves new mining contracts

House finally approves new mining contracts

JAKARTA (JP): The House of Representatives has finally
approved the drafts of the controversial seventh generation
contracts of work (COWs) to prospect and develop mineral
resources in the country, a legislator said yesterday.

Iskandar Mandji of Golkar, said that Commission VI, which is
responsible for assessing the contracts, would pass the contracts
without any changes.

"We have approved the contracts but we recommend the
government further examine the applicants to prevent a scam,"
Mandji told The Jakarta Post yesterday.

According to the existing law, all mining contracts should
gain House endorsement before being passed to President Soeharto
for final approval.

The seventh generation COWs, the latest series of contracts to
prospect and develop mineral resources, have sparked controversy
after newspapers reported that members of Commission VI had
received "illegal funds" from the contract applicants to smooth
the deliberation process.

Commission VI for industry, mining, manpower and investment
has delayed the COWs deliberation in protest of the bribery
charge.

The commission and the Ministry of Mines and Energy denied the
reports.

Mandji said commission members approved the draft contracts
even though several companies had applied for "so many
concessions".

"Do they really want to develop the concession they applied
for or do they just want to sell the concessions to others later?
Many people are making money from selling mining concessions,"
said Mandji, a commission member.

"That's why we want the government to further check
applicants," he said, adding that giving mining concessions of up
to two million hectares to a company was too much.

According to the Ministry of Mines and Energy, companies which
applied for concession areas up to two million hectares include
Canada's Yamana Resources Inc. (11 concessions covering 2.1
million hectares) and Canada's International Pursuit (eight
concessions of 2.8 million hectares). They both prospect for gold
in various areas throughout the country.

The commission also found another Canadian company applying
for 13 concessions covering areas of more than two million
hectares in Kalimantan using different names like Batec, Catec,
Datec, Eatec, Fatec, Gatec, Hatec, Katec, Matec, Natec, Patec and
Qatec.

"We don't know why it uses different names. We hope there is
no bad intention behind it," said Mandji.

A total 171 companies have applied for seventh generation COWs
but 32 of them recently withdrew their applications.

Mandji said the commission in its recommendation also urged
the government to improve the shareholding of local companies in
mineral projects, which are now mostly owned by foreign mining
companies.

Minister of Mines and Energy I.B. Sudjana earlier proposed a
change in the draft COWs to allow the government to have a stake
in all mining ventures.

But Sudjana withdrew his proposal following opposition from
the applicants and mining experts, saying the proposal did not
make sense. (jsk)