Soeharto expected to approve seventh generation COW this year
JAKARTA (JP): Director General of Mining at the Ministry of Mines and Energy Adjat Sudradjat expected President Soeharto would approve this year the controversial seventh generation contracts of work (COWs) for the development of the country's mineral resources.
He said presidential approval of the COWs was the last requirement to be fulfilled before Minister of Mines and Energy I.B. Sudjana put his signatures on them.
"We hope the signing of the draft COWs can take place by the end of the year," Adjat told reporters yesterday.
The government initially received 164 applications for the seventh generation COWs, but 31 companies have since withdrawn due to financial difficulties or after finding that the concession areas they applied for contained inadequate minerals.
Contractors are allowed to explore the concession areas they apply for while their applications are being processed.
Aside from the 164 seventh generation COWs for the development of mineral resources, the government is also currently processing 12 applications for third generation COWs for the development of the country's coal deposit.
The seventh generation COWs have sparked controversy lately after the previous House of Representatives threatened to delay deliberations on them following press reports stating that House members had received illegal money from the Ministry of Mines and Energy to smooth out deliberations.
The House only agreed to continue deliberations after the ministry publicly denied the report.
Adjat said the House had approved the draft COWs on Sept. 24, but called on the ministry to consider some points of recommendation before further processing the COWs.
The existing law does not give the House a right to change the draft COWs, but only to provide recommendations and advice.
The House, in its advice, called on the ministry to prevent what it called a "conglomeration of the mining sector", pointing to the fact that some contractors had applied for concession areas that were "too large".
Information from the Ministry of Mines and Energy states that some foreign contractors have applied for several concession areas covering more than a total of two million hectares.
The contractors include Canada's Yamana Resources Inc. (11 concession areas covering 2.1 million hectares) and Canada's International Pursuit (eight concession areas of 2.8 million hectares). The companies prospect for gold in various areas throughout the country.
Adjat said the ministry could not take concrete measures to follow up the House's call for the prevention of a conglomeration in the mining sector because the House did not clearly define the meaning of conglomeration.
Adjat said the House argued that some companies applied for concession areas that were "too large", but it did not specify at what point a concession area owned by a contractor would be considered "too large".
"Also, the House did not specify what the maximum size of concession areas should be under control of a mining contractor," he said. (jsk)