Aurora said RI's autonomy policy "fundamentally flawed"

Australian mining firm Aurora Gold, which operates a gold mine at Mount Muro in Central Kalimantan, voiced strong criticism against Indonesian autonomy policy, saying the policy was fundamentally flawed.

Company managing director Alan Scott said the implementation of the autonomy policy in the beginning of this year had brought about chaotic results and caused a headache for the mining industry.

"The fundamentally flawed regionalization policies of the current central government have been implemented in an equally flawed way with understandably chaotic results.

"The region can never posses the people and infrastructure necessary to regulate mining. While the current political infighting continues, and probably for a considerable time thereafter, we will see no improvement in this situation," Scott said in his speech during the company's annual general meeting in Perth.

Scott also complained that the regional authorities had imposed many new rules which were inconsistent with the contract of work (COW) awarded by the central government to mining investors.

Scott however said the company's subsidiary Indo Muro Kencana was committed to continue its operation despite all the problems and regulatory vacuum.

"Our Indonesian managers are for all intents and purposes operating in a regulatory vacuum. Our response to this situation is to conform to the old COW-based rules whilst attempting to respond positively to the new 'rules' as they emerge.

"This is not an easy task as many of the emerging new 'rules' are inconsistent with the terms of the COW and would have the effect of increasing the overall tax take by the various levels of government," Scott said.

Indo Muro is currently developing two gold reserves, respectively in the Mount Muro and Kerikil areas. It is eyeing two other gold prospects in the nearby areas of Sukang and Tambung Lahung. (Bodega)