President okays Sudjana's move on coal funds
President okays Sudjana's move on coal funds
JAKARTA (JP): President Soeharto said yesterday the
government's 13.5 percent share of private coal-mining
contractors' output belonged to the public who were represented
by the government.
"Therefore, the funds derived from the coal share shall be
returned to the rightful owner," the President was quoted as
saying by Minister of Mines and Energy I.B. Sudjana.
"The President's remarks clearly reflected his full support
for my order for the transfer of coal funds," Sudjana said.
Sudjana reported to Soeharto yesterday on a recent OPEC
ministerial meeting, the latest developments in the battle for
the Busang gold mine and the widely-publicized controversy over
Sudjana's order for the transfer of funds from state-owned PT
Tambang Batubara Bukit Asam (Taba).
Sudjana told the House of Representatives on Wednesday that
the transfer was meant to stop Taba wasting the government's
money.
"Moreover, Taba as a limited liability company -- although a
wholly state-owned corporation -- is not entitled to the funds
derived from the government's share of the coal contractors'
production," Sudjana said.
Taba should have transferred all the funds from the sale of
the government's coal share to the Ministry of Mines and Energy,
he said.
But Taba directors have argued the money should have been
transferred to the finance ministry's treasury and not to the
minister of mines and energy's bank account.
Private coal-mining companies must hand over 13.5 percent of
their output to the government in concession fees and royalties.
The government had assigned Taba to manage its coal share,
including the sale of coal and transfer of proceeds to the
government.
"I learnt after I took over the ministry (in March, 1993) that
Taba had sold the government's coal share at between $3 and $4 a
ton below the market price. I also found out that Taba had not
marketed the coal by itself but through a trading company,"
Sujanda said.
This cut the government's revenue, he said, adding that Taba
had used much of the money inefficiently instead of transferring
it to the government.
Official estimates of the funds derived from the government's
coal share differ widely. Sudjana estimated Rp 320 billion
(US$136.7 million) had come from the coal share, while the
finance minister put the figure at just Rp 288.4 billion.
Sudjana regretted he could save only Rp 50 billion of the
funds from Taba.
Rp 50 billion was transferred to the minister of mines and
energy's account in the third quarter of 1994.
But a legislator questioned the finance minister at a hearing
on Tuesday why the coal funds were not transferred directly to
the state treasury instead of to the minister's account.
Sudjana also denied rumors yesterday that his son, I.B. Dharma
Yoga, was heavily involved in the mines and energy business.
"I don't know. I have not received any reports on that,"
Sudjana said in response to a question on whether the Darga
Group, which reportedly has 12 subsidiaries, is controlled by his
son.
Busang, oil
On negotiations between Bre-X Minerals Ltd. and Barrick Gold
Corp. for the development of the Busang gold mine in East
Kalimantan, Sudjana disclosed that the two Canadian companies had
dissolved the preliminary agreement they concluded last week.
Under the preliminary agreement, Bre-X was to own 25 percent
and Barrick 75 percent of the private stake in the project, and
contribute equally to the government's 10 percent stake.
"The government has set Dec. 31 as their new deadline for
concluding a joint venture agreement," Sudjana said, adding that
the government would intervene to speed up the development of the
Busang mine which reportedly holds around 57 million ounces of
gold.
On the international market, Sudjana said the price of
Indonesian crude oil from April to last month averaged $20.31 a
barrel, much higher than the $16.50 envisaged by the government
for the current 1996/1997 fiscal year ending next March. (vin)