Mining Minister Sudjana reassures investors

Mining Minister Sudjana reassures investors

JAKARTA (JP): Minister of Mines and Energy Ida Bagus Sudjana
reassured foreign investors of the stability of Indonesia's
economic policies and favorable business climate yesterday,
discounting the recent spate of riots as a small wave in the
current rainy season.

Sudjana specifically reaffirmed the government's commitment to
existing regulations on mining investments and put recent
criticisms of the policy down to a lack of information and
technical knowledge.

"They (critics) got confused between total national gain and
the gain from equity share ... This clearly shows a lack of
proper understanding of the matter," he told a business luncheon
at the Mercantile Club.

Sudjana did not specifically address the recent controversy
over the way the government handled the huge Busang gold mine in
East Kalimantan.

The short but big wave of sharp criticism over the last two
months seemed to have been set off by the unusual manner in which
the government treated Canada's Bre-X Minerals Ltd. which made
the huge gold discovery.

After the government failed to force a joint venture between
Bre-X and Barrick Gold Corp, also of Canada, the battle for the
estimated 77 million ounces of gold ended last week with Bre-X
owning 45 percent, the Indonesian government and politically-well
connected companies 30 percent and PT Freeport Indonesia 15
percent of the mine.

Sudjana told the luncheon, which was hosted by the Indonesia-
Australia Business Council and the Indonesia-Canada Chamber of
Commerce, that the misplaced critics had caused unnecessary
worries among mining investors.

"They (critics) even alleged that one of the big mining
companies had not paid any tax to the government," he said.

But the critics turned out to be completely wrong when the tax
office announced early this month the target of the criticism (PT
Freeport) was the largest corporate taxpayer in Indonesia in
1995, he said.

Sudjana did not have time for a question-and-answer session
after his speech but assigned his advisor, Adnan Ganto, and
Secretary General of his ministry Umar Said to answer
businesspeople's questions.

Asked what was the greatest lesson learned from the battle for
Busang, Umar said: "Follow the existing regulations and rules and
don't announce anything before a concrete contract has been
signed." (vin)