Sudjana to probe Canadian contracts

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana said the government would thoroughly investigate Canadian mining contractors who have applied for seventh generation contracts of work (COWs) in order to prevent such scams like the Busang scandal.

Sudjana said he would also conduct on-site inspections of the companies during his visit to Canada to attend the Energy Ministerial Meeting of the Asia Pacific Economic Cooperation's (APEC) in Vancouver.

The ministerial meeting will be held during the APEC summit, which is scheduled for November in Canada.

"We don't want the (Canadian) companies to come here in name only. We want to ensure that they will bring in big investment," Sudjana said after a meeting with President Soeharto.

He added that Canadian companies accounted for 75 percent or 124 of the 164 mining firms which applied for seventh generation COWs.

Sudjana said he would seek information on the companies from the Canadian government during his stay in Vancouver.

Aside from Canadian companies, other applicants for the COWs come from Singapore, Australia, the United States, South Korea and Panama.

They mostly plan to prospect for gold in Kalimantan, Sumatra, Sulawesi, Nusa Tenggara and Irian Jaya.

Canada's Yamana Resources Inc. is the largest applicant in terms of the number of applications, with 12 contracts covering 2.7 million hectares in Kutai and Bulungan district, East Kalimantan.

Other Canadian companies which have made several applications include Corsair Exploration Inc., Barrick Gold Corp., International Pursuit Corp., Ivanhoe Capital, Minorca Resources Inc., Teck Mining Ltd., Ingold Holding Indonesia Inc., Indomin Resources Ltd., Olympic Resources Ltd., Northernera Diamonds and others.

House members and the public have urged the government to carefully examine the capability of mining contractors following the Busang gold field scandal in East Kalimantan which involved Canadian firm Bre-X Minerals.

Bre-X claimed to have found the world's largest gold resource in Busang, prompting many giant companies as well as some eminent Indonesians to vie for claims in the mine.

But an independent study showed the Busang gold deposit to be insignificant. (jsk)