Indonesia gold mine investors can appeal takeover, minister says

Investors could appeal Indonesia’s decision to take over a lucrative private gold mine in Sumatra after its permit was revoked due to alleged links to deadly floods last year, according to the country’s finance minister.

“It’s not the end of the game,” Finance Minister Purbaya Yudhi Sadewa said in an interview with Bloomberg TV’s Haslinda Amin on Tuesday, referring to the Martabe gold mine operated by PT Agincourt Resources. The company is controlled by PT Astra International and ultimately by multinational Jardine Matheson Holdings Ltd.

“Jardine can always complain, or complain to our government, as long as they conduct their business properly,” he told a business forum in Jakarta. “Our government is very fair.”

Martabe has been caught up in a broader crackdown following floods and landslides in Sumatra that killed more than 1,000 people late last year. Indonesia recently moved to revoke permits of more than a dozen resource companies on the island, including the Martabe mine, after authorities suggested a link between companies’ land-clearing practices and the disaster.

Sovereign wealth fund Danantara last week said it was creating a new company to take over the Martabe mine.

Agincourt has said it respects Indonesia’s mining directives and policies, and that its priority is to ensure good corporate governance and sustainable mining practices. United Tractors, the listed unit that controls Agincourt, and Astra International, said in stock exchange filings dated Jan. 22 that they hadn’t received official notification from the government and were seeking to follow up.

Purbaya framed the government’s moves against several mining companies as a clean-up of what he described as longstanding bad practice in the sector, without elaborating.

He said the revocation of permits was a step toward fostering a positive investment climate in Southeast Asia’s largest economy. “It’s not like we are against mining,” he said, “but we are against illegal mining.”

(By Ben Otto)