Calgary Mine Firm Wins Indonesia Tussle

A small Canadian mining company has enlisted U.S.-based Freeport-McMoRan Copper and Gold Inc. to help it develop one of the world’s richest gold deposits.

The alliance announced Monday by Bre-X Minerals Ltd., of Calgary, Alberta, is a setback for two other Canadian mining companies - Barrick Gold Corp., the world’s No. 3 gold producer, and Placer Dome Inc., Canada’s second-biggest mining company after Barrick. Barrick and Placer were vying for a stake in the giant Busang project in Indonesia.

The agreement also enables Bre-X, which discovered the field, to keep a larger share for itself than in earlier proposals.

Bre-X said it will own 45 percent of the project, while Freeport will own 15 percent and be its sole operator. The Indonesian government will have a 10 percent share, and two Indonesian companies will own 15 percent each.

Bre-X, which is an exploration company and lacked the expertise to develop the project, was originally forced by Indonesia to form a joint venture with Barrick. Under the terms proposed by the government, Bre-X would have held just 25 percent of the venture and Barrick 65 percent.

After Bre-X and Barrick couldn’t agree on the terms, Mines and Energy Minister Ida Bagus Sudjana said Friday the field might be opened up to international bidding.