PT Nusamba will quit Busang if there is no gold
PT Nusamba will quit Busang if there is no gold
JAKARTA (JP): The minister of mines and energy, Ida Bagus
Sudjana, said yesterday the government would wait for the results
of an independent audit of the Busang gold site in East
Kalimantan before deciding the next course of action.
Sudjana said after meeting President Soeharto yesterday that
the results of the laboratory test on Busang samples, to be
conducted in an Australian laboratory, would be ready in three to
four weeks.
"We need to take decisions quickly to find the best way for us
and the country," he said.
Business tycoon Muhammad "Bob" Hasan, who has a stake in
Busang through PT Nusantara Ampera Bhakti (Nusamba), said he and
his Indonesian partners would withdraw from the project if the
property did not contain gold.
"If there is no gold we will pull out ... why should we remain
if there is nothing inside, it is not feasible," he said.
He dismissed press reports that he intended to buy into Bre-X
Minerals, the Canadian mining firm which made the Busang gold
find.
"That is only newspaper talk, there is no such plan. Why
should we buy when we are already shareholders (in the Busang
project)," he said.
Nusamba holds 30 percent of Busang, the Indonesian government
10 percent, Bre-X 45 percent and the US mining giant Freeport-
McMoRan 15 percent.
Bre-X shocked the mining community last month when it issued a
statement saying there was a possibility that Busang's gold
reserves had been overstated.
It had earlier put gold reserves at 71 million ounces, which
would have been the biggest find of the century.
Bre-X has been weathering a storm since preliminary tests by
Freeport indicated the property might contain "insignificant"
amounts of gold.
The announcement caused investors to panic and dump Bre-X
shares. Worried investors lopped almost C$3 billion (US$2.2
billion), or more than 80 percent, off the company's market
value.
Bre-X has hired Canadian mining consultant Strathcona Mineral
Services to carry out an independent audit on the Busang site to
determine how much gold was there.
A spokeswoman for the Busang Indonesian Gold JV consortium,
formed Feb. 17 to develop the Busang property, said Strathcona
had completed four of its six test drillings at Busang.
She said the results of the four drillings were stored in a
locked hangar in Balikpapan, East Kalimantan.
Strathcona is in the process of drilling the fifth hole.
When asked if Indonesia would suffer losses if Busang had less
gold than first thought, Sudjana said "maybe the loss will be the
Indonesia's name ... a little embarrassment."
He said the government would tighten mining laws, taking into
consideration changes in the sector.
Commitment
Canadian gold firms Barrick Gold Corp and Placer Dome Inc --
two former bidders for the Busang gold deposit -- have reaffirmed
their commitment to continue exploring for gold in Indonesia.
Executives of the two firms said they would continue
exploration in Indonesia regardless of what happens with Busang.
They denied Canadian press reports that dozens of mining
companies, including Barrick and Placer Dome, would halt mineral
exploration in Indonesia until they got final approval.
The president of Placer Dome subsidiary PT Placer Emas
Indonesia, John E. Loney, said the development in the Busang gold
mine did not affect his company's Indonesian operations.
"We will continue our exploration here and will spend at least
$2 million for exploration this year alone," Loney said.
He said Placer Emas had invested more than $4 million on gold
exploration in Southeast Kalimantan since 1994 and planned to
explore in Sulawesi and Sumatra this year.
"We take Indonesia as a very prospective place to be. I think
Indonesia's geology is good for gold. Besides, Indonesia's
contract of work is a very good legal basis for mine
development," Loney said.
Barrick's vice president for communications, Vincent Borg,
expressed similar optimism.
He said that since setting up its exploration office in
Jakarta in mid-1994, Barrick had spent almost $15 million on
exploration in Indonesia.
He said Barrick was exploring 10 properties in Indonesia in a
series of joint ventures with local companies.
Five of the properties -- three in Irian Jaya (2.9 million
hectares), one in Sumatra (143,000 hectares), and one in East
Nusa Tenggara (1.2 million hectares) -- are subject to the sixth
generation of contracts of works.
The other five -- four in Kalimantan (more than three million
hectares), one in Sumatra -- are under the seventh generation of
contracts of work. (rid)