President may take over Busang case

JAKARTA (JP): Minister of Mines and Energy Ida Bagus Sudjana said President Soeharto will take over thm Busang gold case if Barrick Gold Corp. and Bre-X fail to seal their partnership deal by Feb. 15.

"We hope the two Canadian companies conclude the deal before the Feb. 15 deadline so that we do not need the President's help to decide what to do," he said after a cabinet meeting.

Barrick and Bre-X are currently engaged in intensive negotiations about the establishment of a joint venture to manage the Busang II gold mine. The two Canadian companies have agreed to the government's proposal to allocate 67.5 percent of the planned joint venture's shares to Barrick and 22.5 percent to Bre-X, which discovered the gold deposit in the Busang mine, and another 10 percent to the Indonesian government.

But the two Canadian companies have yet to finalize a deal.

Competition for a stake in the Busang II gold mine in East Kalimantan has increased with the entrance of more foreign and local companies.

The foreign companies include Canadian mining firms Placer Dome and Teck, and Newmont of the United States. State-owned mining companies, PT Tambang Timah and PT Aneka Tambang, are also in the running.

State-owned gold and nickel mining company PT Aneka Tambang has announced its intention to acquire a stake in the gold reserve reported to contain a potential 57 million ounces of gold.

PT Tambang Timah Tbk., another state company under the supervision of the Ministry of Mines and Energy, also has expressed interest. The minister has given Tamban Timah the go- ahead to exploit the mine, and according to the firm's president, Erry Riyana Hardjapamekas, it has held serious discussions with timber baron Moh. Bob Hasan.

Bob Hasan, a politically-well connected businessman, has bought 50 percent of Syakerani's shares in PT Askatindo, Bre-X's local partner.

Sudjana confirmed earlier that the government would not increase its stake in the joint venture because of financial constraints and would give the opportunity to local enterprises.

Placer Dome is offering the government a 40 percent stake in the venture, much more than the 10 percent offered by Barrick. (09)