Sudjana wants gold miners to announce deal soon

Sudjana wants gold miners to announce deal soon

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana said
yesterday that he wanted the Canadian gold firms, Bre-X Minerals
and Barrick Gold Corp., to publicly announce their deal on the
huge Busang gold mine in East Kalimantan soon.

The minister said the announcement would show their
seriousness about the mining project and ensure that both sides
were consistent in their deal.

"We expect them to announce their deal on the Busang gold mine
soon. They should do it before reporting to us," Sudjana told the
press yesterday.

He said that after the two companies reported their deal to
him, he would report it to President Soeharto.

He said the government would not guide the two firms on how to
resolve their dispute over the Busang gold mine. "We won't do
that. If we do that, we'll be accused of forcing them to reach an
agreement. We don't like that," he said.

Early last month, Sudjana told a hearing with House Commission
VI that he expected the two Canadian companies to set up a joint
venture by February to develop the gold mine.

He said the two firms had reached a basic agreement over the
Busang gold mine, but they had not yet resolved some minor
issues. He did not elaborate.

Before the hearing, the ministry's secretary-general, Umar
Said, said the two Canadian firms had finally agreed to form a
joint venture to develop the Busang gold mine, which was
estimated to contain 57.33 million ounces of gold.

He said Barrick and Bre-X had agreed that the government would
have a 10 percent stake in the gold mine, while 90 percent would
be 75 percent owned by Barrick and 25 percent owned by Bre-X.

"The deal is very positive. And the next step will be for them
to make an agreement with us and set up a joint venture company
to develop the Busang gold mine," Umar said.

He said the agreement was in accord with the government's wish
that Bre-X enter a partnership with Barrick by Dec. 4 to develop
what Bre-X claimed was the world's largest gold deposit.

Umar said that if the two firms had failed to strike a deal by
the deadline, the government would have taken "necessary steps"
to expedite the mine's development.

But reliable sources say the two Canadian companies have not
reached a deal over Busang gold mine, because Bre-X, which
claimed to have discovered the gold mine, wants a bigger stake in
it.

Analysts foresee international repercussions if Barrick is
given a bigger stake than Bre-X, which held a provisional license
for the gold mine. The provisional license qualifies Bre-X to get
a final contract of work for the gold mine. (bnt)