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)