Aust mining firm hopes to return
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An Australian-owned mining company that was kicked out of its East Java copper, gold and silver site following a dispute with local investors has gone into partnership with veteran Indonesian politician and media mogul Surya Paloh in hopes of regaining co
The move is seen as an attempt by Australia's Intrepid Mines to shore up its political weight and nudge Indo Multi Niaga (IMN) to the negotiating table. Intrepid has sunk US$95 million into the lucrative project and owns 80 per cent of the venture. The developments are being watched closely as the course of the country's mining sector becomes increasingly uncertain.
The relationship between Intrepid Mines and its Indonesian investors, IMN, had been deteriorating for eight months. In fact, the Australian firm only realised IMN had changed hands when their staff of 660 was told to pack up and go by the new owners who descended on the site last month.
Resource-rich Indonesia has been selling itself as being investor friendly and an economic darling. In the last five years, it posted its strongest growth rates since the 1998 Asian financial crisis. However, cases such as Intrepid's are tainting its image. Investors fear that a raft of new mining regulations unveiled this year, including export taxes, a ban on unprocessed metals exports and limits on foreign ownership, smack of rising economic nationalism.
