S N Vasuki – The fallout from the Busang gold controversy in Indonesia has been immediate. Foreign mining companies, primarily from Australia and Canada, which are awaiting official approval for new mining projects in Indonesia are concerned that the controversy would lead to major delays and changes in the government's policy towards foreign investment in the mining sector.

However, Mines & Energy Minister Ida Bagus Sudjana yesterday reassured mining companies that there would be no change in the "current regulatory regime" and asserted that domestic critics of the country's mining policy were ill-informed and making a "lot of noise" ahead of this year's parliamentary elections.

At last count, foreign mining companies were awaiting final approval for at least 250 mining projects in Indonesia. The total investment at stake runs into billions of dollars. A majority of the companies are from Australia and Canada.

The Canadian Embassy in Jakarta is believed to have forwarded several letters from Canadian mining firms in recent days to the Mines & Energy Ministry expressing concern about potential delays.

The biggest worry of foreign mining companies is that parliament will be unable to approve pending projects before the May 29 elections. "If the projects are not approved by parliament before it goes into recess in April, this will lead to a delay of over a year," said a senior executive of a Canadian mining firm.

Although the elections will be held on May 29, the new parliament convenes only in November. And the executive said it was unlikely to take major decisions until the presidential elections of March 1998.

Mines & Energy secretary general Umar Said yesterday said that he was "fully aware" of the situation. "We are trying our best to expedite this matter before parliament goes into recess" he said adding "cross your fingers and pray within".

Mr Umar also urged foreign mining companies "not to make any noise outside" as it would lead to further delays.

The foreign mining companies awaiting final approval are under the ministry's so-called seventh generation contracts of work (COW). A COW is final approval given by the government to a mining company to start production.

The seventh generation will be the latest tranche of foreign mining projects to be approved by the government since the 60s. The controversial Busang gold venture was a sixth generation project.

Senior executives of several mining companies said that their biggest concern was that the government, bowing to pressure from economic nationalists, would dilute the country's liberal foreign investment policy in the mining sector.

However, Mr Sudjana yesterday lambasted critics of the country's mining policy. "Some of our educated people, probably due to their lack of information and technical knowledge, have turned critics of the mining policy," he said.