BHP still struggling to secure permits for Gag nickel project
Tuesday, May 1 2001 - 04:30 AM WIB
Mining company PT Gag Nikel, a joint venture between Australian conglomerate BHP Pty Ltd and Indonesian state mining company PT Aneka Tambang (Antam), is still struggling to secure permits from the ministry of forestry to continue its nickel project in the protected forests on the Gag Island in Maluku.
"BHP continues to have numerous meetings with the Indonesian department of forestry seeking recognition of PT Gag Nikel's prior right to use surface mining techniques in a later decreed protected forest," BHP said in its quarterly report made available to Petromindo.Com.
The company said Gag Nikel continued making preparation for the resumption of drilling activities on its island pending the resolution to the protected forest issue.
BHP and Antam started exploration on the island in 1996 and received the mining contract of work from the government for their joint venture in February 1998.
But, Gag Nikel was forced to suspend activities on the island following the issuance of the Forestry Law No. 41/1999, which bans open-pit mining in protected forests, and the announcement by the ministry of forestry that the contract area was protected.
Gag Nikel had spent US$50 million for exploration activities and had found 240 million tons of high-grade nickel and cobalt resources when it suspended its activities on the island several years ago.
BHP has 75 percent shares in Gag Nikel, while Antam has the remaining 25 percent.
Last year, BHP announced that it had reached an agreement with Canadian firm Falconbridge allowing the latter to acquire 37.5 shares owned by BHP for $75 million. The money will be used to finance the bankable feasibility study of the project.
BHP said discussions continue with Antam and Falconbridge to resolve the various issues relating to Falconbridge joining the Gag Island joint venture.
"Agreement has been reached with Falconbridge on the scope of work for the pre-feasibility study. BHP has proposed clarifications to several commercial issues and PT Aneka Tambang is studying the proposal," BHP said without elaborating on the proposal. (Bodega)