23/07/2012 - 15:07

Intrepid decision raises Indo worries

23/07/2012 - 15:07

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Analysts have raised concerns for Western Australian miners operating in Indonesia, after Intrepid Mines’ joint venture partner suspended operations at the Tujuh Bukit project in East Java.

Intrepid announced today that its joint venture partner, Indo Multi Niaga, had suspended operations at the Tujuh Bukit project without negotiation.

The private Indonesian firm asked that members of senior management, including all expatriate employees seconded from Intrepid leave the site

However, the project expenditure of $US95 million ($92 million) had been solely funded by Intrepid to date, including providing IMN's shareholders with than $A50 million to meet its financing commitments, it said.

The company’s stocks have been hammered by investors, plunging 54.9 per cent on the ASX today, to finish trade at 25 cents.

Patersons Securities analyst Simon Tonkin said the decision by IMN would undoubtedly raise concerns for other Australian miners operating in Indonesia.

Global miners Rio Tinto and Newcrest have significant operations in Indonesia, while Western Australian miners active in the region include Straits Resources, Kingsgrove Mining, Finders Resources, Strike Resources and Matilda Zircon.

There are a total of 38 publicly listed Australian firms operating in Indonesia, along with a host of privately-owned companies.

The share prices of all of the public companies had been affected adversely since the foreign ownership laws were introduced, Mr Tonkin said.

"When you're putting a project into production you don't really need uncertainty about how much you own," he said.

"Investors are trying to look for a jurisdiction where the government is not going to turn around and go: `we'll take some more of that' which is also happening in West Africa."

 

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