Freeport questions House's recommendation to review mining contract

Giant gold mining operation PT Freeport Indonesia questioned on Wednesday the recommendation of the House of Representatives to the government to review contract with the company.

"Contract is a contract? It can't be made an issue. President Abdurrahman Wahid himself has said several times that contract must be honored," Freeport Indonesia vice president Yuli Ismartono told Kompas.

Yuli was responding to a recommendation issued by the House commission I on social and political affairs that the government should review Freeport's mining contract of work on grounds that the Irian Jaya people had not been benefited by the existence of the company, which has the world's largest gold reserves in the province.

Freeport Indonesia is 80 percent controlled by Freeport-McMoran Copper & Gold, 10 percent government of Indonesia and another 10 percent the Nusamba Group which is related to the former president Soeharto.

Separately, deputy of the Minister of Investment and State Enterprises Benny Pasaribu said that forcing a review into Freeport's contract of work would create a negative impact to the country's investment climate.

Pasaribu was quoted by Bisnis Indonesia daily as saying that the government would honor the contract and that if there's a problem it's better to sit down together to seek for the solution.

Meanwhile, Chairman of the Indonesian Mining Association (IMA) Beni Wahyu also said that a review into Freeport's mining contract would create uncertainty in the country's mining sector and discourage investors to make new investments.

President of the publicly listed state tin mining firm PT Tambang Timah Erry Riyana Hardjapamekas concurred. He said that the government must honor contracts made with foreign investors.(*)