Soeharto expected to approve seventh generation COW this year
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seventh generation COWs, but 31 companies have since withdrawn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)