Ashton's Galuh Cempaka says transfer of diamond output to Jakarta legal

Diamond mining company PT Galuh Cempaka stressed that the transfer of its diamond output from the Banjarbaru mayoralty in South Kalimantan to Jakarta was legal.

Galuh Cempaka deputy operations manager Prawito Halim was quoted by the Kapos daily as saying that the transfer of diamond for acid washing at PT Logam Mulia in Jakarta was not against the mining license it obtained from the directorate general of mining in Jakarta.

Prawito also said that the director general of geology and mineral resources Wimpie S. Tjetjep had recently sent a letter saying that the government had no objection to the transfer of the bulk sampling diamond output.

He added that keeping the diamond output in a secured place in Jakarta run by a company called Securicor before finding a buyer was not against any government regulation.

He said that the company deeply regretted the earlier negative comments including from South Kalimantan Governor Sjahriel Darham accusing that Galuh Cempaka had illegally transferred around 4,000 carat of diamond output out of the province to Jakarta for sale. Sjahriel had been quoted by the local press that his administration intended to sue the company.

But Banjarbaru Major Rudy Resnawan defended Galuh Cempaka. Rudy said that the diamond transfer to Jakarta was legal because it was only for acid washing. He said that if the company sells the output, it must first pay royalty and other fees to the local government.

Eslewhere, Prawito said that the company had transferred around 3,000 carats of diamonds to Jakarta. He said that the value was much less than the US$22.5 million investment already made by the foreign investors.

He also said that the polemic about the transfer was due to the new regional autonomy law introduced in January this year which provides greater power to the regions in managing their economic and social affairs. But Prawito said that in the mining sector, the mining companies were still making their report directly to the central government in Jakarta.

PT Galuh Cempaka is owned by Australian miner Ashton Mining (80 percent) in partnership with state owned miner PT Aneka Tambang Tbk (Antam) (20 percent).

Anglo-Australian mining giant Rio Tinto has recently acquired majority of Ashton share, giving it indirect control of Galuh Cempaka.

The project area is subject to a seventh generation Contract of Work (CoW), which was awarded by the Indonesian Minister of Mines on 19 February 1998.(*)