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)