W. Sumbawa invites Mimika to form mine association

W. Sumbawa invites Mimika to form mine association

Markus Makur , The Jakarta Post, Timika

West Nusa Tenggara's regency of West Sumbawa, where the PT Newmont gold mine operates, has invited Mimika regency in Papua to form a mineral-mining association in Indonesia.

The two regencies will act as initiators for 37 other regencies in Indonesia that own mines.

West Sumbawa Vice Regent Mala Rahman said that the regency mining association was crucial in exchanging information and experience for the sake of boosting the provincial generated income (PAD) from mining.

Rahman said although the regency was only six years old and would hold its second leadership election next year, it had been able to gain shares from PT Newmont, thanks to efforts and hard work by the West Sumbawa regency and West Nusa Tenggara provincial administrations.

"We have struggled up to the level of international arbitration and have gained shares from PT Newmont," Rahman told reporters recently.

"We are conducting a working visit to Mimika in the framework of exchanging information and have invited Mimika to become a pioneer in establishing a mineral mining association in Indonesia."

He said West Sumbawa had implemented a free education program from pre-school to doctorate level, funded by earnings from the shares. West Sumbawa's PAD stood at a mere Rp 35 billion (US$3.5 million), an amount dwarfed by Mimika's PAD.

Head of the West Sumbawa Income Office W. Musyafirin said West Nusa Tenggara was able to acquire 10 percent shares from PT Newmont thanks to hard work and international arbitration.

However, West Sumbawa will only get 3 percent of the 10 percent, while the remaining 7 percent is divided between parent regency Sumbawa and the provincial administration.

"West Sumbawa regency and West Nusa Tenggara province are struggling to gain more shares from PT Newmont," Musyafirin said.

"The regency is currently drafting an ordinance to earn commission in goods procurement at PT Newmont as part of its efforts to raise the PAD, as is stipulated by law."

Mimika regency secretary Wilhelmus Haurissa responded positively to the request by West Sumbawa on the establishment of a regency mining association.

However, he said he would initially convey the matter to the Mimika regent.

Haurissa said Mimika residents gain 1 percent from US gold and copper mining firm PT Freeport Indonesia's profits and free health care provided to seven native tribes at the company-built Mitra Community Hospital.

Mimika's PAD is derived from a number of taxes paid by PT Freeport Indonesia.

Haurissa said company's contribution to Mimika was very high, especially towards development.

He added the cost of public services, especially for residents living in mountainous, rural and coastal areas of Mimika was high due to the use of expensive transportation modes, such as helicopters and pioneer planes.